CBN cuts interest rate to 26.5%

The Central Bank of Nigeria (CBN) has slashed the Monetary Policy Rate (MPR) to 26.5 per cent.

This is a 50 basis points reduction from the previous 27 per cent rate.

The decision was taken at the 304th meeting of the Monetary Policy Committee (MPC) held in Abuja on Tuesday.

The outcome was announced by the CBN Governor, Mr. Olayemi Cardoso, with 11 members in attendance.

The MPR serves as the benchmark interest rate and is a key monetary policy tool used by the apex bank to control inflation, manage liquidity, and maintain macroeconomic stability.

The MPC said the decision to cut the benchmark rate was driven by sustained improvements in key macroeconomic indicators, particularly inflation.

Headline inflation declined for the eleventh consecutive month to 15.1 per cent in January 2026, reflecting continued price moderation.

The Cash Reserve Ratio was retained at 45.0 per cent for commercial banks and 16.0 per cent for merchant banks.

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The Liquidity Ratio was maintained at 30.0 per cent, the Standing Facilities Corridor was fixed at +50/-450 basis points around the MPR.

The committee noted that although inflationary pressures are easing, maintaining other policy parameters reflects a cautious stance aimed at safeguarding financial system stability.

This rate cut represents the lowest benchmark rate since May 2024, when the interest rate stood at 26.25 per cent.

By: Babajide Okeowo

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