CBN retains interest rate at 26.5%

The Central Bank of Nigeria (CBN) has retained the benchmark interest rate at 26.5 per cent, maintaining a cautious stance amidst inflationary pressures.

CBN Governor Olayemi Cardoso disclosed the committee’s decision at the conclusion of the bank’s two-day, 306th Monetary Policy Committee (MPC) meeting, held from 20 to 21 July in Abuja.

This decision marks the second consecutive retention of the Monetary Policy Rate (MPR) at 26.5 per cent, following a 50-basis-point reduction in February from 27 per cent. Speaking after the meeting, the CBN Governor stated that the committee’s decision was based on a thorough assessment of the economy.

“The MPC decision followed a thorough assessment of the balance; although headline inflation moderated marginally in June 2026, it has heightened due to renewed hostilities in the Middle East,” Mr Cardoso said.

The MPC also adjusted the asymmetric facilities corridor around the MPR to +50/-450 basis points—a move aimed at discouraging banks from keeping idle funds with the CBN and encouraging increased lending into the economy. Furthermore, the committee maintained the Cash Reserve Ratio (CRR) for commercial banks at 45 per cent, retained the rate for merchant banks at 16 per cent, and kept the CRR on non-TSA public-sector deposits at 75 per cent for liquidity management considerations.

The interest rate was held after Nigeria’s headline inflation rate eased slightly to 15.91 per cent in June, down from 15.93 per cent recorded in May, according to the National Bureau of Statistics (NBS).

Nigeria’s headline inflation rate had been on an upward trend since March, rising for consecutive months—recording 15.93 per cent in May, from 15.69 per cent in April and 15.38 per cent in March. The rise in inflation followed the escalation of the Middle East conflict, which began in February and drove global oil prices higher.

While a ceasefire briefly eased global oil prices and contributed to slower inflation in June, renewed hostilities involving the U.S. and Iran have again heightened tensions around the Strait of Hormuz.