The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has cut the interest rate by 50 basis points to 26.50 per cent from 27 per cent.
The CBN Governor, Olayemi Cardoso, said after the 304th meeting of the MPC on Tuesday in Abuja that all the members of the MPC unanimously agreed upon the decision to cut interest rate.
“The committee decided to reduce the monetary policy rate by 50 basis points to 26.50 per cent,” he said.
Cardoso stated that the liquidity ratio was maintained at 30 per cent, and the standing facilities corridor was adjusted to +50 to -450 basis points around the monetary policy rate.
He announced that the committee retained the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks and 16 per cent for merchant banks, while the 75 per cent 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 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,” Cardosa added.
Cardoso stated that the MPC noted the remarkable performance of Nigeria’s external sector and attributed the positive 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,” he said, adding that the order would play a crucial role in improving fiscal revenue.
The CBN uses the MPR, which works as the benchmark interest rate, to manage inflation, macroeconomic stability, and liquidity.
GIK/APA