The Central Bank of Nigeria has retained its benchmark Monetary Policy Rate at 26.5 percent, maintaining its tight monetary policy stance as it seeks to curb inflation while safeguarding economic stability. The decision was announced by CBN Governor Olayemi Cardoso after the conclusion of the Monetary Policy Committee’s 306th meeting in Abuja, where members voted unanimously to keep the rate unchanged.
In addition to retaining the MPR, the committee left other key monetary parameters unchanged. The Standing Lending Facility was retained at 50 basis points above the Monetary Policy Rate, while the Standing Deposit Facility remained at 450 basis points below the MPR. The Cash Reserve Ratio was also maintained at 45 percent for Deposit Money Banks, 16 percent for Merchant Banks, and 75 percent for public sector deposits outside the Treasury Single Account. Officials said the decision reflects confidence that previous policy measures are gradually producing the desired results.
Cardoso explained that while inflationary pressures remain a major concern, recent economic indicators point to improving stability following months of monetary tightening and ongoing economic reforms. However, he warned that global uncertainties, including geopolitical tensions and volatility in energy markets, continue to pose risks that could affect Nigeria’s inflation outlook and broader economy.
The Monetary Policy Rate serves as the benchmark for lending across Nigeria’s financial system, influencing borrowing costs for businesses and consumers. By keeping the rate unchanged, the CBN signaled that controlling inflation remains its immediate priority, even as many businesses continue to advocate for lower interest rates to stimulate investment, job creation and economic expansion.
The decision comes as Nigeria continues to grapple with high living costs despite signs that inflation has begun to moderate. While headline inflation has eased in recent months, food prices, transportation costs and other essential goods remain expensive, leaving many households under financial pressure. Economists say maintaining a high interest rate may help slow inflation further but could also keep borrowing costs elevated for businesses and individuals.
The announcement has generated mixed reactions among economists, investors and members of the public. Many financial analysts said the decision was largely expected given persistent inflationary risks and global economic uncertainty. On social media, some Nigerians welcomed the CBN’s focus on stabilising prices, while others argued that high interest rates continue to make access to loans difficult for small businesses and entrepreneurs. These reactions reflect public sentiment and have not been independently verified.
As Africa’s largest economy, Nigeria’s monetary policy decisions are closely watched by international investors and financial institutions. The CBN’s decision to maintain the benchmark rate underscores its commitment to restoring price stability while carefully monitoring domestic and global economic developments. Whether this strategy succeeds in reducing inflation without slowing economic growth will remain a key issue in the months ahead. Do you think the CBN should have reduced interest rates to support businesses, or was retaining the MPR at 26.5 percent the right decision to fight inflation?
