CBN RETAINS INTEREST RATE AT 26.5% AMID GLOBAL UNCERTAINTIES
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By; Aina Daniel
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 26.5 per cent, maintaining its current monetary policy stance amid ongoing global economic uncertainties.
CBN Governor, Olayemi Cardoso, announced the decision on Tuesday after the committee’s 306th meeting in Abuja.
The decision marks the second time in 2026 that the MPC has left the benchmark interest rate unchanged.
The committee also retained the asymmetric corridor around the MPR at +500/-100 basis points, the Cash Reserve Ratio (CRR) at 40.5 per cent for deposit money banks and 16 per cent for merchant banks, while keeping the liquidity ratio at 30 per cent.
Cardoso said the committee opted to maintain the current policy stance after assessing prevailing economic conditions and associated risks.
According to him, although headline inflation eased slightly in June 2026, global uncertainties—particularly renewed tensions in the Middle East—continue to pose risks to inflationary pressures, making a cautious monetary approach necessary.
He noted that Nigeria’s economy has remained resilient despite external shocks, attributing the performance to reforms implemented by both fiscal and monetary authorities.
The CBN governor also highlighted improved coordination between the Federal Government and the apex bank, saying stronger policy alignment would enhance economic stability and improve the effectiveness of policy measures.
The MPC further welcomed the positive outcome of the ongoing banking sector recapitalisation exercise, noting improvements in the resilience of the financial system as reflected in key prudential indicators.
While expressing optimism that inflation will continue to moderate, the committee warned that a prolonged escalation of the Middle East conflict could undermine that outlook.
Cardoso said the MPC advised the CBN to sustain close monitoring of financial institutions to safeguard financial stability and mitigate emerging risks.
He reaffirmed the committee’s commitment to maintaining price stability and a sound financial system, adding that the MPC remains ready to adjust policy if economic conditions require further intervention.
The decision comes after Nigeria’s inflation rate declined to 15.91 per cent in June 2026, its first drop in three months. Economic analysts had earlier urged the apex bank to maintain rates, citing persistent increases in food prices despite broader signs of inflation moderation.
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