The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.50 per cent from 27 per cent.
The decision was announced on Tuesday at the conclusion of the Bank’s 304th Monetary Policy Committee (MPC) meeting in Abuja.
CBN Governor Olayemi Cardoso said the committee unanimously agreed to ease the benchmark interest rate.
“The Committee decided to reduce the Monetary Policy Rate by 50 basis points to 26.50 per cent,” Cardoso said.
He added that the liquidity ratio was retained at 30 per cent, while the standing facilities corridor was adjusted to +50 and –450 basis points around the MPR. The Cash Reserve Ratio (CRR) was maintained at 45 per cent for commercial banks and 16 per cent for merchant banks, while the 75 per cent CRR on non-TSA public sector deposits was also retained.
Cardoso explained that the decision was based on a balanced assessment of risks to the economic outlook, noting that the disinflation trend is expected to continue, supported by the lagged impact of earlier monetary tightening, sustained exchange rate stability, and improved food supply.
He said the committee considered the continued moderation in headline inflation in January 2026, marking the 11th consecutive month of decline. According to him, the downward trend was driven by the impact of previous contractionary policies, stability in the foreign exchange market, stronger capital inflows, and improvements in the balance of payments.
The governor also cited relative stability in petroleum product prices and improved supply of staple foods as additional factors helping to anchor inflation expectations.
Cardoso noted improvements in Nigeria’s external sector performance, attributing the gains to higher export earnings and increased remittance inflows, which have enhanced foreign exchange stability and boosted investor confidence.
He further welcomed the newly issued Presidential Executive Order 09, which redirects oil and gas revenues into the federation account, describing it as a measure that would strengthen fiscal revenues.
The MPR serves as the benchmark interest rate used by the CBN to manage inflation, liquidity, and overall macroeconomic stability.
At its previous meeting in November, the MPC retained the MPR at 27 per cent. The latest decision marks the first rate cut since September last year.
