- Decision
- Maintain
- Rate change
- 0 bps
- Policy rate after decision
- 26.5%
The Monetary Policy Committee of the Central Bank of Nigeria retained the Monetary Policy Rate at 26.5% in July 2026, judging that a cautious stance remained appropriate as headline inflation eased only marginally while global uncertainty intensified with renewed hostilities in the Middle East; after holding at 27.5% in July 2025, the CBN cut by 50 basis points to 27.0% in September 2025 and by a further 50 basis points to 26.5% in February 2026, then kept the rate unchanged in May and July 2026. The CBN also left the standing facilities corridor at +50/-450 basis points around the MPR and kept the cash reserve requirement at 45.00% for Deposit Money Banks, 16.00% for Merchant Banks and 75.00% for non-TSA public sector deposits. Headline inflation edged down to 15.91% in June 2026 from 15.93% in May as lower non-food inflation offset higher food inflation, while real GDP growth slowed to 3.89% in the first quarter of 2026 from 4.07% in the preceding period and the composite Purchasing Managers Index improved to 50.1 in June from 49.6 in May. Gross external reserves rose to USD52.52 billion as of July 17, enough to cover about 11 months of goods and services imports. The committee said global growth is expected to slow to 3.0% in 2026 from 3.5% in 2025, with upside risks to inflation from higher crude oil and other commodity prices, supply chain disruptions and climate-related shocks, and it reaffirmed readiness to take appropriate policy measures as macroeconomic conditions evolve.
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.