The Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 26.5 per cent following the conclusion of the 305th meeting of its Monetary Policy Committee (MPC) held on May 19 and 20, 2026.
The decision was announced by the Governor of the Central Bank of Nigeria, Olayemi Cardoso, after the two-day meeting attended by all 11 members of the committee.
In addition to retaining the benchmark interest rate, the committee also retained the asymmetric corridor around the MPR at +50/-450 basis points.
It further retained the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45 per cent, Merchant Banks at 16 per cent, and non-TSA public sector deposits at 75 per cent.
The MPC said its decision was based on a comprehensive assessment of domestic and global economic developments, noting that although inflation had risen marginally for two consecutive months, the increase was largely driven by temporary external shocks.
According to the committee, the impact of global pressures on the Nigerian economy had remained relatively subdued due to ongoing policy reforms, including exchange rate stability, stronger external reserves, improved monetary policy transmission, fiscal consolidation and a well-capitalised banking sector.
The committee also highlighted the effects of the Middle East crisis, which it said had increased energy prices, transportation costs and logistics expenses globally. However, it noted that reforms implemented by the government and the apex bank had helped cushion the economy from severe spillover effects.
The MPC welcomed Nigeria’s recent sovereign rating upgrade, describing it as a reflection of improving macroeconomic fundamentals and confidence in the country’s economic reform agenda.
It also expressed satisfaction with the completion of the banking sector recapitalisation exercise, which resulted in the emergence of 33 stronger banks with improved financial soundness indicators capable of supporting economic growth.
On inflation trends, the committee disclosed that headline inflation rose slightly to 15.69 per cent in April 2026 from 15.38 per cent in March, driven mainly by increases in food prices. Food inflation climbed to 16.06 per cent from 14.31 per cent due to higher transportation and logistics costs as well as seasonal factors.
Core inflation, however, moderated to 15.86 per cent in April from 16.21 per cent recorded in March. The 12-month average inflation rate also declined for the sixth consecutive month to 19.16 per cent from 20.05 per cent.
The committee further noted that month-on-month headline inflation eased significantly to 2.13 per cent in April compared to 4.18 per cent in March, reflecting moderation in both food and core inflation components.
On economic growth, the MPC said Nigeria’s real Gross Domestic Product grew by 4.07 per cent in the fourth quarter of 2025, up from 3.98 per cent in the preceding quarter, supported by stronger performance in agriculture and industry.
Growth in the oil sector rose to 6.79 per cent from 5.84 per cent, aided by improved refining activities, while the non-oil sector expanded by 3.99 per cent, driven mainly by services, information and communication, and transportation activities.
The committee also noted that Nigeria’s gross external reserves increased to $49.49 billion as of May 15, 2026, compared to $48.35 billion at the end of March, providing import cover for over nine months and supporting exchange rate stability.
Globally, the MPC observed that economic growth is expected to slow in 2026 due to geopolitical tensions, tighter financial conditions and disruptions in energy markets and supply chains. It added that several central banks around the world had adopted cautious monetary policy stances in response to persistent inflationary pressures.
Looking ahead, the committee expressed confidence that inflationary pressures would moderate over time as the effects of previous monetary tightening, exchange rate stability and improved food supply continue to take hold.
The next MPC meeting is scheduled for July 20 and 21, 2026.
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