CBN Retains Interest Rate at 26.5% as MPC Maintains Tight Monetary Policy

The Central Bank of Nigeria (CBN) has decided to keep the Monetary Policy Rate (MPR), which serves as the country’s benchmark interest rate, unchanged at 26.5%.

CBN Governor Olayemi Cardoso made this announcement following the conclusion of the 306th meeting of the Monetary Policy Committee (MPC), held on July 20 and 21, 2026, in Abuja.

During the two-day meeting, attended by all 11 committee members, the group assessed recent developments in both the domestic and global economic landscape.

The decision to maintain the current rate reflects the CBN’s commitment to continuing its stringent monetary policy approach.

The central bank aims to sustain progress in moderating inflation, stabilizing the foreign exchange market, and reinforcing recent macroeconomic advancements.

The CBN noted that Nigeria’s headline inflation rate eased marginally to 15.91% in June 2026 from 15.93% in May, indicating a slight moderation in overall price pressures.

Food inflation accelerated to 3.75% every month in June from 2.98% in May, pointing to renewed pressure on food prices.

The Cash Reserve Ratio was retained at 45% for commercial banks and 16% for merchant banks.

The Standing Facilities Corridor remained at +50/-450 basis points around the MPR.

The CRR on non-TSA public sector deposits was retained at 75%.

“Global uncertainties have heightened due mainly to the renewed hostilities in the Middle East,” Governor Cardoso said.

“In view of the evolving developments, maintaining a cautious policy stance remains appropriate.”

The decision to retain the MPR at 26.5% means the CBN has kept its benchmark interest rate unchanged as it continues to balance the need to control inflation with efforts to support economic activity.

The Monetary Policy Rate serves as the benchmark interest rate used by the CBN to influence lending rates, liquidity conditions, inflation and overall macroeconomic stability.

Higher interest rates generally increase borrowing costs for businesses and consumers but may help moderate inflationary pressures.

Nigeria’s business community has repeatedly raised concerns over elevated borrowing costs and their impact on investment and business expansion.

Inflation remains one of the major policy concerns for the CBN despite the moderation recorded compared with 2025 levels.

The retention of the benchmark rate, therefore, leaves monetary conditions unchanged for businesses and consumers, as the apex bank continues to monitor inflation and other macroeconomic developments.

Nigeria’s Monetary Policy Rate (MPR) has experienced an unprecedented tightening cycle since 2023 under the leadership of Cardoso, before entering a gradual easing phase in late 2025 and 2026.

President Bola Tinubu appointed Cardoso as CBN governor in 2023, and the government set out to implement a series of monetary and fiscal policies reforms, including floating the local currency and initiating tight monetary policy to combat inflation and exchange rate volatility.

The most dramatic phase of tightening occurred in 2024 when the CBN raised the benchmark rate six consecutive times, taking it from 18.75% to 27.50% in November 2024.

The next meeting of the Monetary Policy Committee is scheduled for September 21 and 22, 2026.