The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) from 27 per cent to 26.5 per cent, signalling continued confidence in the country’s moderating inflation trend.
CBN Governor Olayemi Cardoso announced the decision on Tuesday at the end of the committee’s 304th meeting held in Abuja.
The 50-basis-point reduction marks the lowest benchmark rate since May 2024, when it stood at 26.25 per cent. The MPR serves as the foundation for lending rates across the economy.
According to Cardoso, the committee reached a unanimous decision to ease the rate, while maintaining other monetary parameters.
“The cash reserve ratio (CRR) is retained at 45 per cent for DMBs; and 16 per cent for merchant banks respectively, and 75% for Non-TSA public sector deposits,” he said.
“Liquidity ratio (LR) remained unchanged at 30 per cent and the asymmetric corridor retained by +50/-450 basis points around the MPR.
“The committee’s decision was premised on a balanced evaluation of risks to the outlook, which suggests that the ongoing disinflation trajectory would continue.
“The sustained deceleration in year-on-year headline inflation in January 2026 marks the 11th consecutive month of decline.”
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The rate adjustment follows a drop in Nigeria’s inflation rate to 15.1 per cent in February 2026 and comes six months after the previous reduction to 27 per cent in September 2025.
Looking ahead, the governor expressed optimism that inflationary pressures would continue to ease, supported by exchange rate stability and improved food supply. However, he cautioned that increased fiscal spending, including election-related expenditure, could create upside risks.
Cardoso also highlighted significant gains in Nigeria’s external sector. Gross external reserves rose to 50.45 billion dollars as of 16 February 2026 the highest level recorded in 13 years.
“The committee particularly noted the remarkable performance of Nigeria’s external sector, evidenced by robust accretion to foreign exchange reserves, supported by higher export earnings and increased remittance inflows,” he said.
He added that foreign exchange stability, strong capital inflows and an improved balance of payments position have helped anchor economic expectations and reinforce the disinflation trend.
