The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has elected to hold the Monetary Policy Rate (MPR) steady at 26.5 percent, marking the second time the committee has opted for a “wait-and-see” approach in 2026.
Announcing the decision following the committee’s 306th meeting in Abuja on Tuesday, CBN Governor Olayemi Cardoso stated that the pause is intended to allow the bank to evaluate the impact of previous hikes and analyze incoming economic data before making further adjustments.
Alongside the benchmark interest rate, the MPC retained the asymmetric corridor at +500/-100 basis points. The Cash Reserve Ratio (CRR) remains at 40.5 percent for deposit money banks and 16 percent for merchant banks, while the liquidity ratio was held at 30 percent.
Governor Cardoso noted that while headline inflation saw a marginal moderation to 15.91 percent in June 2026, external factors—specifically renewed hostilities in the Middle East—present significant upside risks to domestic price stability.
“The committee’s decision to maintain the current policy stance followed a thorough assessment of the balance of risks,” Cardoso said. “In view of evolving developments, maintaining a cautious monetary policy stance remains appropriate.”
Despite these global tensions, the Governor highlighted the resilience of the Nigerian economy, attributing its stability to the ongoing reforms implemented by both fiscal and monetary authorities. He also emphasized the improved coordination between the CBN and the Federal Government, noting that stronger policy alignment is essential for macroeconomic stability.
**Banking Sector Strength**
The MPC expressed satisfaction with the progress of the banking sector recapitalization exercise. Cardoso noted that the exercise has bolstered the resilience of the financial system, as evidenced by improved prudential and financial soundness indicators.
However, the committee urged the apex bank to maintain strict supervision of lenders to mitigate potential risks and preserve the overall health of the financial sector.
**Expert Reactions**
Economists had largely anticipated a hold on rates. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), observed that while core inflation is moderating, food prices remain volatile. He noted that a stable interest rate environment is necessary to prevent further pressure on the productive sectors of the economy.
The CBN reaffirmed its commitment to price stability and indicated its readiness to adjust policy should macroeconomic conditions shift significantly in the coming months.
