The Monetary Policy Committee of the Central Bank of Nigeria has lowered the benchmark interest rate to 26.5 per cent.
The decision marks the second rate cut under the current leadership of the apex bank.
Governor Olayemi Cardoso announced the outcome on Tuesday after the committee’s 304th meeting held in Abuja.
Cardoso said, “The Committee decided to reduce the monetary policy rate by 50 basis points to 26.5%.”
He also stated that the MPC resolved to “retain the Standing Facilities Corridor around the MPR at +50/-450 basis points” and to “retain the Cash Reserve Requirement for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and 75.00 per cent for non-TSA public sector deposits.”
The latest adjustment follows a similar 50-basis-point reduction in September 2025, while the committee maintained rates at its November 2025 meeting.
According to the governor, the move was based on “a balanced evaluation of risks to the outlook,” which indicates that “the ongoing disinflation trajectory would continue, largely supported by the lagged transmission of previous monetary tightening, sustained exchange rate stability, and enhanced food supply.”
He explained that headline inflation declined slightly to 15.10 per cent in January 2026 from 15.15 per cent recorded in December 2025. This represents the eleventh straight month of year-on-year decline.
Cardoso added that “Food inflation declined markedly to 8.89 per cent from 10.84 per cent,” while “core inflation declined to 17.72 per cent from 18.63 per cent.”
On a month-to-month basis, inflation dropped to -2.88 per cent in January from 0.54 per cent in December. The committee said this reflects “a continued softening of price pressures.”
The governor also highlighted progress in the external sector. He said the country’s gross external reserves increased to $50.45 billion as of February 16, 2026. He described it as “the highest in 13 years,” with an import cover of 9.68 months for goods and services.
He attributed the growth in reserves to stronger export earnings and higher remittance inflows. He said these factors have supported exchange rate stability and boosted investor confidence.
Cardoso further noted the introduction of Presidential Executive Order 09, which channels oil and gas revenues into the Federation Account. The committee “welcomed” the order and “acknowledged the potential impact of this Order in improving fiscal revenue and accretion to reserves.”
On the banking sector, the governor said key financial indicators remain within regulatory limits. He disclosed that 20 out of 33 banks involved in the recapitalisation programme have met the new minimum capital requirement. The committee described this as “steady progress towards a more robust and well-capitalised financial system.”
The MPC reiterated “the strategic importance of the recapitalisation exercise” and urged the bank to ensure its successful completion to strengthen resilience and support growth.
On economic performance, the Purchasing Managers’ Index stood at 55.7 points in January 2026. This suggests continued expansion in economic activity and possible improvement in output for the last quarter of 2025.
Looking ahead, Cardoso said the outlook shows that “the current momentum of domestic disinflation will continue in the near term,” supported by exchange rate stability and better food supply.
He, however, warned that “increased fiscal releases, including election-related spending, could pose upside risk to the outlook.”
The governor reaffirmed the MPC’s commitment to “an evidence-based policy framework, firmly anchored on the Bank’s core mandate of ensuring price stability, while safeguarding the soundness and resilience of the financial system.”
He added that the next MPC meeting is scheduled for May 19 and 20, 2026.
