CBN Retains Interest Rate at 26.5 Percent for Second Consecutive Time

The Central Bank of Nigeria (CBN) has retained its benchmark interest rate at 26.5 per cent, holding the rate steady for a second consecutive meeting despite a marginal easing in inflation.

CBN Governor Olayemi Cardoso announced the decision on Tuesday at the conclusion of the apex bank’s 306th Monetary Policy Committee (MPC) meeting, held over two days in Abuja. “The Committee decided as follows: retain the monetary policy rate at 26.5 per cent,” Mr Cardoso said, briefing journalists after the meeting.

The decision keeps the Monetary Policy Rate (MPR) unchanged since February 2026, when the Committee cut it by 50 basis points from 27 per cent. The rate has now been retained twice in a row, following an earlier hold at the Committee’s previous meeting in May.

The MPC also left other monetary policy tools unchanged. The Committee adjusted the asymmetric corridor around the MPR to +50/-450 basis points, a mechanism designed to discourage commercial banks from parking idle funds with the CBN and to encourage more lending to the economy. The Cash Reserve Ratio (CRR) was retained at 45 per cent for commercial banks and 16 per cent for merchant banks, while the CRR on non-Treasury Single Account public sector deposits was kept at 75 per cent.

Mr Cardoso said the decision followed a careful assessment of competing pressures. “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,” he said.

Data from the National Bureau of Statistics (NBS) shows Nigeria’s headline inflation eased slightly to 15.91 per cent in June 2026, down from 15.93 per cent in May.

Before the meeting, analysts had widely expected the Committee to hold rates steady. The Chartered Institute of Bankers of Nigeria had projected a retention, with its president, Dr Dele Alabi, saying the CBN’s inflation-targeting framework and recent economic data did not provide a compelling case for a rate move in either direction. Standard Chartered Bank’s Africa and Middle East chief economist, Razia Khan, said escalating tensions in the Middle East and the pricing of domestic fuel in US dollars meant the bank no longer expected policy easing in 2026, and now projects the CBN will hold the rate at 26.5 per cent until after the 2027 elections.

The MPC’s next meeting date is expected to be announced by the CBN in due course.