CBN cuts benchmark interest rate to 26.5% amid easing inflation, lowest level since 2024

The monetary policy committee (MPC) of the Central Bank of Nigeria (CBN) has lowered the country’s benchmark interest rate to 26.5 percent, marking the lowest level since May 2024.

The decision was announced on Tuesday in Abuja by Olayemi Cardoso, governor of the apex bank, at the conclusion of the committee’s 304th meeting.

According to Cardoso, MPC members unanimously agreed to reduce the monetary policy rate (MPR) by 50 basis points from 27 percent to 26.5 percent. The MPR serves as the baseline lending rate in the economy and influences other interest rates.

The latest move follows a continued moderation in inflation, with Nigeria’s headline inflation easing to 15.1 percent in February 2026. It also comes six months after the committee cut the rate to 27 percent in September 2025.

Despite the adjustment to the MPR, other key monetary parameters were left unchanged. The cash reserve ratio (CRR) remains at 45 percent for deposit money banks and 16 percent for merchant banks, while non-TSA public sector deposits will continue to attract a 75 percent CRR. The liquidity ratio was maintained at 30 percent, and the asymmetric corridor around the MPR was retained at +50/-450 basis points.

Cardoso said the committee’s decision was based on a careful assessment of economic risks and confidence that the current disinflation trend will persist. He noted that headline inflation has now declined for 11 consecutive months as of January 2026.

He attributed the sustained easing of price pressures to improved foreign exchange stability, strong capital inflows, and a strengthened balance of payments position, all of which have helped stabilise expectations and reinforce the downward inflation trajectory.

The MPC is scheduled to hold its next meeting on May 19 and May 20, 2026.