The Central Bank of Nigeria has cut the interest rate by 50 basis points to 26.50 percent from 27 percent. The CBN Governor, Olayemi Cardoso, made this during the Apex Bank’s 304th Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday.
Cardoso said all members of the MPC unanimously agreed upon the decision. “The committee decided to reduce the monetary policy rate by 50 basis points to 26.50 percent,” he said.
The CBN Governor stated that the liquidity ratio was maintained at 30 percent, and the standing facilities corridor was adjusted to +50 to -450 basis points around the monetary policy rate.
He said the committee 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.
“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.
“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.
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“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,” he explained.
Cardoso stated that the MPC noted the remarkable performance of Nigeria’s external sector. He attributed the improvement to the higher export earnings and increased remittance inflows.
“This has contributed to greater stability in the foreign exchange market and bolstered investor confidence.
“Members also welcomed the newly issued Presidential Executive Order 09, which redirects oil and gas revenues into the federation account,” the CBN Boss stated.
The CBN uses the MPR, which works as the benchmark interest rate, to manage inflation, macroeconomic stability, and liquidity.
Last November, the MPC retained the Monetary Policy Rate (MPR) at 27.00 percent. The last time the apex bank cut interest rates was in September last year, from 27 percent to 27.50 percent.
The country’s interest rate dropped in January to 15.10 percent from 15.15 percent, according to the National Bureau of Statistics.
