CBN retains MPR at 26.5%
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria has retained the Monetary Policy Rate (MPR) at 26.5 per cent, maintaining its tight monetary measure as it seeks to contain inflationary pressures and preserve macroeconomic stability amid rising global uncertainties.
The decision was disclosed at the end of the 305th MPC meeting held on May 19 and 20, 2026, under the leadership of the CBN Governor, Olayemi Cardoso.
The Committee also retained the asymmetric corridor around the MPR at +50/-450 basis points.
The Cash Reserve Ratio was left unchanged at 45 per cent for Deposit Money Banks, 16 per cent for Merchant Banks, while non-TSA public sector deposits remained at 75 per cent.
The MPC explained that its decision was sequel to a comprehensive assessment of domestic and global economic conditions, noting that recent inflationary pressures were largely driven by external shocks, particularly the ongoing Middle East crisis, which has increased global energy prices and transportation costs.
The Committee expressed confidence that inflationary trends would moderate in the medium term, citing the impact of ongoing reforms, exchange rate stability, stronger foreign reserves and improved monetary policy transmission mechanisms.
Nigeria’s headline inflation increased marginally for the second consecutive month to 15.69 per cent in April 2026, from 15.38 per cent in March, mainly due to higher food prices.
Food inflation increased to 16.06 per cent from 14.31 per cent, reflecting elevated logistics and transportation costs alongside seasonal factors.
But the MPC noted that core inflation moderated to 15.86 per cent in April from 16.21 per cent in March, while the 12-month average inflation rate declined for the sixth consecutive month to 19.16 per cent.
The Committee further observed that month-on-month inflation eased significantly to 2.13 per cent in April from 4.18 per cent in March, suggesting that earlier policy tightening measures were beginning to yield results.
The MPC noted that Nigeria’s real Gross Domestic Product grew by 4.07 per cent in the fourth quarter of 2025, compared with 3.98 per cent in the previous quarter, supported by growth in both the oil and non-oil sectors.
According to the Committee, the oil sector expanded by 6.79 per cent due to improved refining activities in the downstream petroleum sector, while the non-oil sector grew by 3.99 per cent, driven mainly by information and communication as well as transportation and storage services.
The MPC also highlighted the country’s improving external position, revealing that gross external reserves rose to $49.49 billion as of May 15, 2026, compared with $48.35 billion at the end of March. The reserves were said to be sufficient to cover 9.04 months of imports.
The Committee welcomed Nigeria’s recent sovereign rating upgrade, describing it as evidence of improving macroeconomic fundamentals and growing investor confidence in the country’s reform agenda.
It also commended the successful conclusion of the banking recapitalisation exercise, which resulted in the emergence of 33 stronger banks with improved financial soundness indicators capable of supporting economic growth.
The MPC projected that economic growth would remain resilient in 2026 despite downside risks associated with geopolitical tensions and the Middle East conflict.
The Committee reaffirmed its commitment to a forward-looking and data-driven monetary policy framework aimed at ensuring price stability and safeguarding the resilience of the financial system.
