The Monetary Policy Committee (MPC) of the Central Bank of Nigeria has retained the country’s benchmark interest rate at 26.5 per cent, maintaining a cautious stance as it weighs renewed inflation pressures linked to global energy market disruptions and lingering domestic price concerns.
The CBN Governor Olayemi Cardoso announced the decision on Wednesday while briefing journalists after the conclusion of the committee’s two-day meeting in Abuja.
The decision followed the 305th MPC meeting held on May 19 and 20, with all 11 members in attendance.
The committee also retained the asymmetric corridor around the Monetary Policy Rate at +50/-450 basis points and left the Cash Reserve Ratio unchanged at 45 per cent for Deposit Money Banks, 16 per cent for Merchant Banks and 75 percent for non-TSA public sector deposits.
The latest decision extends the CBN’s careful policy approach after two consecutive rate cuts since September 2025, when it delivered its first reduction in five years by lowering the benchmark rate from 27.5 per cent to 27 per cent.
The MPC subsequently held rates steady in November 2025 before cutting again in February 2026 to 26.5 per cent, showing a gradual move away from the aggressive monetary tightening cycle that followed Nigeria’s inflation and foreign exchange crisis.
Wednesday’s decision comes as inflationary pressures show signs of persistence despite broader macroeconomic reforms introduced under the Cardoso-led central bank.
Nigeria’s inflation rate rose marginally for a second consecutive month to 15.69 per cent, according to the latest official data, although the MPC said it believes the uptick is temporary and largely driven by external shocks.
The committee specifically pointed to spillovers from tensions in the Middle East, which it said have increased energy prices, transportation costs and logistics expenses globally.
However, the MPC argued that the impact on Nigeria has remained relatively contained because of earlier economic reforms, including efforts to stabilise the exchange rate, strengthen external reserves, improve monetary policy transmission and reinforce fiscal discipline.
The committee also cited the country’s strengthened banking sector and improved reserve buffers as factors helping the economy absorb external pressures.
“As a result, the pass-through of global commodity and energy price shocks to domestic inflation has been significantly mitigated and would have been more pronounced in the absence of these reforms,” Mr Cardoso said.
The committee added that the conditions necessary for price stability remain in place despite current global uncertainties.
The MPC also welcomed Nigeria’s recent sovereign rating upgrade, saying the development reflects improving confidence in the country’s macroeconomic reforms and direction despite difficult global conditions.
The MPC said maintaining a cautious and vigilant policy stance remains necessary to anchor inflation expectations and preserve macroeconomic stability.
The committee also noted the successful completion of the banking recapitalisation exercise, which it said resulted in 33 banks emerging with stronger financial soundness indicators and improved capacity to support economic growth.
It nevertheless urged banks to remain proactive and adopt necessary measures to address potential post-recapitalisation risks to preserve financial system stability.