The Central Bank of Nigeria (CBN) on Tuesday reduced the monetary policy rate (MPR), the benchmark interest rate, by 50 basis points from 27 percent to 26.50 percent
The CBN Governor, Olayemi Cardoso, who disclosed the reduction of the MPR during the 304th Monetary Policy Committee (MPC) meeting held in Abuja, said all members of the MPC unanimously agreed on the slashing of the benchmark interest rate.
Specifically, the banker told journalists during the post-meeting briefing, that the committee decided to reduce the monetary policy rate by 50 basis points to 26.50 percent but agreed that the liquidity ratio should be maintained at 30 percent, while the standing facilities corridor was adjusted to +50 to -450 basis points around the monetary policy rate.
Cardoso said that the MPC retained the Cash Reserve Ratio (CRR) at 45 percent for commercial banks and 16 percent for merchant banks, while the 75 percent CRR on non-TSA public sector deposits was equally maintained.
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He further clarified: “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 lad transmission of previous monetary tightening, sustained exchange rate stability and enhanced food supply.
“In reaching this policy decision, the committee took into account, the sustained deceleration in year-on-year headline inflation 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.
“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”, the apex bank governor added.
Cardoso maintained that the MPC members noted the improving performance of Nigeria’s external sector based on improved export earnings and increased remittance inflows.
According to him, these positive developments have contributed to greater stability in the foreign exchange market and bolstered investor confidence.
This is even as he said that the MPC members also welcomed the newly issued Presidential Executive Order 09 which redirected oil and gas revenues into the federation account, adding that the order will play a crucial role in improving fiscal revenue.
It would be recalled that at its last meeting in November, the MPC retained the MPR at 27.00 percent. Before then, during the September 2025, the committee slashed the benchmark interest rate from 27 percent to 27.50 percent.
