- Decision
- Lower
- Rate change
- 50 bps
- policy rate
- 26.5%
The Central Bank of Nigeria’s Monetary Policy Committee cut the Monetary Policy Rate (MPR) by 50 bp to 26.5 % after assessing that an eleven-month slide in inflation, aided by earlier tightening, exchange-rate stability and better food supply, gives room for “moderate easing” while still anchoring price expectations. The decision extends the rate path that saw a 50 bp reduction in September 2025 followed by a hold in November. The Committee left operating settings unchanged, keeping the standing-facilities corridor at +50/-450 bp around the MPR and maintaining CRRs at 45 % for deposit money banks, 16 % for merchant banks and 75 % for non-TSA public-sector deposits. Headline inflation eased to 15.10 % y/y in January from 15.15 % in December, with food inflation down to 8.89 % and core at 17.72 %; the January PMI of 55.7 points signals ongoing expansion. On the external side, reserves climbed to USD 50.45 bn by 16 February, providing 9.68 months of import cover and supporting FX market stability amid higher export earnings and remittance inflows. Globally, the MPC cited forecasts of stronger 2026 growth and continued disinflation tempered by protectionism and geo-economic fragmentation. It expects domestic disinflation to persist but warned that forthcoming fiscal spending could pose upside risks, pledging an evidence-based approach to keep price stability while safeguarding financial-sector resilience.
Rate evolution
From July 2025 to July 2026, the Central Bank of Nigeria eased the Monetary Policy Rate by 100 basis points to 26.5 per cent, moving from an initial hold to cuts interrupted by pauses as disinflation progressed. The shift was driven first by a need to sustain disinflation despite persistent underlying price pressures and global trade and geopolitical uncertainty, then by stronger macroeconomic stability, with falling headline, food and core inflation, exchange rate stability, firmer reserves and capital inflows, improved food supply, moderating Premium Motor Spirit prices and resilient growth creating room to support recovery even as double-digit inflation and excess liquidity kept policy cautious.
After cutting by 50 basis points in February 2026 on a balanced assessment of risks, the Committee held in May as inflation rose for a second month, judging the pickup transitory and linked to Middle East-driven energy and logistics costs, while arguing that tightening, exchange rate stability, reserve buffers, enhanced food supply and banking-system resilience should restore disinflation. It retained the policy rate again in July after headline inflation eased marginally in June, ending three consecutive months of uptick, as renewed hostilities in the Middle East heightened uncertainty and upside risks to inflation through energy prices, even as core inflation moderated on exchange rate stability, reserves increased, policy coordination helped moderate the external shock and banking recapitalisation improved financial-system resilience, leaving policy cautious, vigilant and data-driven.
In September 2026, the Committee reset the Monetary Policy Rate at 23 per cent and recalibrated the Standing Facilities Corridor to 50 basis points above and 300 basis points below the policy rate, describing the measures as an operational realignment rather than a change in stance after divergence between the policy rate and market rates weakened transmission. It judged that three consecutive months of declining headline inflation, robust external reserve buffers, improved external sector fundamentals and stronger investor confidence provided headroom for the reset without undermining disinflation, while flagging prolonged Middle East tensions and election-related spending as upside risks and keeping future decisions data-dependent.