- Decision
- Lower
- Rate change
- 350 bps
- Policy rate after decision
- 23%
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria reset the Monetary Policy Rate (MPR) to 23.00% in September 2026 from 26.5%, citing moderating inflation, resilient growth and the need to strengthen policy transmission, while stressing that the operational realignment did not change the monetary policy stance and would support the transition to an inflation-targeting framework. Over the past year, the MPC cut the MPR by 50 basis points to 27.0% in September 2025, held it in November, cut it by another 50 basis points to 26.5% in February 2026 and held it in May and July. The standing facilities corridor was recalibrated to +50/-300 basis points around the MPR, while cash reserve requirements were retained. Headline inflation eased for a third consecutive month to 15.39% in August, real GDP growth accelerated to 4.43% in the second quarter and the completed banking recapitalisation strengthened capital buffers. Gross external reserves reached USD 55.25 billion on September 18, providing about 11.3 months of import cover, while the current-account surplus increased in the second quarter. Globally, the Middle East conflict, trade uncertainty, supply-chain disruptions and elevated commodity prices weighed on growth and kept inflation risks tilted upward. The MPC expects inflation to moderate further and output to remain resilient through the rest of 2026, while prolonged geopolitical tensions and election-related spending pose upside risks to prices, and said future decisions would remain data-dependent.
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.