Barbara Bako, Abuja.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria has retained the Monetary Policy Rate (MPR), otherwise known as the benchmark interest rate, at 26.5 per cent as it seeks to sustain disinflation and preserve macroeconomic stability amid global and domestic economic uncertainties.
The decision was announced at the end of the Committee’s 305th meeting held on May 19 and 20, 2026, chaired by the Governor of the Central Bank of Nigeria, Olayemi Cardoso.
According to the communiqué issued after the meeting, the Committee also retained the asymmetric corridor around the MPR at +50/-450 basis points.
The MPC further retained the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45 per cent, Merchant Banks at 16 per cent, and non-TSA public sector deposits at 75 per cent.
The Committee said its decisions were based on a comprehensive assessment of risks to the economic outlook, noting that although inflation had risen marginally for two consecutive months, the increase was largely driven by external shocks and was considered temporary.
“The MPC recognised its transitory nature and remained confident that the current macroeconomic environment is sufficiently robust to support a return to disinflation,” the communiqué stated.
The Committee identified spillovers from the Middle East crisis as a major source of pressure on energy prices, transportation costs and logistics.
However, it noted that the impact on the Nigerian economy had remained limited due to policy reforms already implemented, including exchange rate stability, stronger external reserves, improved monetary policy transmission, a well-capitalised banking system and ongoing fiscal consolidation.
The MPC also welcomed the recent sovereign credit rating upgrade, describing it as evidence of improving macroeconomic fundamentals and increasing confidence in the country’s reform trajectory and policy credibility.
On the banking sector, the Committee expressed satisfaction with the successful conclusion of the banking recapitalisation exercise, which resulted in the emergence of 33 banks with stronger financial soundness indicators capable of supporting economic growth.
It, however, urged the apex bank to remain proactive in addressing potential post-recapitalisation risks to safeguard financial system stability.
The Committee noted that headline inflation rose marginally to 15.69 per cent in April 2026 from 15.38 per cent in March, mainly due to increases in food prices driven by transportation and logistics costs as well as seasonal factors.
Food inflation increased to 16.06 per cent in April from 14.31 per cent in March, while core inflation moderated to 15.86 per cent from 16.21 per cent within the same period.
The MPC also observed that month-on-month headline inflation eased to 2.13 per cent in April from 4.18 per cent in March, while the 12-month average inflation declined for the sixth consecutive month to 19.16 per cent.
On economic growth, the Committee said Nigeria’s real Gross Domestic Product (GDP) expanded by 4.07 per cent in the fourth quarter of 2025, compared to 3.98 per cent in the preceding quarter, supported by growth in the industry and agriculture sectors.
The oil sector grew by 6.79 per cent during the period, driven by improved refining activities, while the non-oil sector expanded by 3.99 per cent, supported by activities in information and communication, transportation and storage services.
The Committee further disclosed that the country’s gross external reserves rose to $49.49 billion as of May 15, 2026, from $48.35 billion at the end of March, providing import cover for 9.04 months of goods and services.
Looking ahead, the MPC projected that economic growth would remain resilient in 2026 despite downside risks linked to geopolitical tensions in the Middle East.
It also projected a moderate increase in inflation in the near term but expressed confidence that previous monetary tightening measures, exchange rate stability and improved food supply would support a return to disinflation.
The next meeting of the Committee is scheduled for July 20 and 21, 2026.
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