The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points, lowering it from 27 per cent to 26.50 per cent.
The announcement was made following the apex bank’s 304th Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday.
CBN Governor Olayemi Cardoso said the decision was unanimous among all members of the MPC. “The committee decided to reduce the monetary policy rate by 50 basis points to 26.50 per cent,” he stated.
Governor Cardoso added that the liquidity ratio was maintained at 30 per cent, while the standing facilities corridor was adjusted to +50 to -450 basis points around the MPR.
He also confirmed that the Cash Reserve Ratio (CRR) for commercial banks remains at 45 per cent, and for merchant banks at 16 per cent, with the 75 per cent CRR on non-TSA public sector deposits also maintained.
“The Committee’s decision was premised on a balanced evaluation of risk to the outlook, which suggests that the ongoing disinflation trajectory would continue largely supported by the lag transmission of previous monetary tightening, sustained exchange rate stability, and enhanced food supply,” Cardoso said.
He noted that the decision was informed by sustained year-on-year headline inflation deceleration in January 2026, marking the 11th consecutive month of decline.
“This downward trajectory in inflation was driven mainly by the continued effect of the contractionary monetary policy, stability in the foreign exchange market, robust capital inflows and improvements in the balance of payments,” he added.
“The momentum was further reinforced by relative stability in the prices of petroleum products and improved food supply conditions, especially staples. These outcomes have indicated that prior tightening has continued to anchor expectations.”
Cardoso further highlighted the positive performance of Nigeria’s external sector, attributing it to higher export earnings and increased remittance inflows.
“This has contributed to greater stability in the foreign exchange market and bolstered investor confidence,” he said.
The Governor also welcomed the recently issued Presidential Executive Order 09, which redirects oil and gas revenues into the federation account. According to him, the order would play a crucial role in improving fiscal revenue.
The CBN uses the MPR as a benchmark interest rate to manage inflation, liquidity, and overall macroeconomic stability. Last November, the MPC retained the MPR at 27 per cent. The last reduction prior to Tuesday’s cut was in September 2025, when the rate was lowered from 27.50 per cent to 27 per cent.
According to the National Bureau of Statistics, the country’s broader interest rate dropped in January 2026 to 15.10 per cent from 15.15 per cent, reflecting the ongoing disinflation trend in the economy.
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