The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) from 27% to 26.5%, the 304th meeting of the Monetary Policy Committee (MPC) announced on February 24, 2026 in Abuja.
The MPR is the benchmark interest rate used by the CBN to guide monetary policy, control inflation, manage liquidity and support macroeconomic stability.
This adjustment follows a period of sustained disinflation and reflects changes in key economic indicators.
The MPC last held the rate at 27% in November 2025 after previous tightening measures aimed at anchoring inflation and stabilising the naira. The new cut marks the first reduction since September 2025.
At the end of the two-day MPC meeting in Abuja, CBN Governor Olayemi Cardoso said members of the committee agreed to trim the MPR by 50 basis points to 26.5%, with all 11 members in attendance supporting the move.
The committee retained other key monetary policy tools, including:
- Cash Reserve Ratio (CRR) at 45% for commercial banks and 16% for merchant banks.
- Liquidity Ratio at 30%.
- Standing Facilities Corridor at +50/-450 basis points around the MPR.
According to the MPC’s statement, the decision reflected improved macroeconomic conditions, particularly continued progress in reducing inflation and maintaining exchange rate stability.
Data from the National Bureau of Statistics show that headline inflation eased to 15.1% in January 2026, extending a downward trend that has persisted for several months.
The rate cut to 26.5% comes amid sustained improvements in inflation and foreign exchange reserves, which are seen as key indicators guiding the committee’s decision.
Maintaining other monetary policy parameters signals a cautious approach by the CBN, aiming to support economic activity while continuing to safeguard financial system stability.
For businesses and borrowers, the reduction in the benchmark rate may help lower borrowing costs, though the pace and impact of transmission of policy changes into lending and investment conditions will unfold over time.
