By Ayo Kehinde
The Monetary Policy Committee of the Central Bank of Nigeria (CBN) has lowered the Monetary Policy Rate by 50 basis points from 27% to 26.5%, signalling a cautious shift toward monetary easing amid evolving economic conditions.
The apex bank had at its 302nd MPC Meeting lowered the interest rate by 50 basis points from 27.50 percent to 27 percent. It also reduced the cash reserve requirement to 45% for commercial banks and 16% for merchant banks and introduced a 75% cash reserve requirement on non-TSA public sector deposits.
Speaking during a press briefing on Tuesday in Abuja, following the conclusion of the MPC’s 304th meeting, CBN Governor, Olayemi Cardoso, said the committee, however, retained the Cash Reserve Ratio at 45 percent for Commercial Banks and 16 percent for Merchant Banks, while the Liquidity Ratio was maintained at 30 percent. In addition, the Standing Facilities Corridor was left unchanged at +50 and –450 basis points around the MPR.
He said the MPC voted unanimously to adjust policy parameters as follows:
“Monetary Policy Rate (MPR): Reduced by 50 basis points from 27% to 26.5%.
“Cash Reserve Ratio (CRR): Retained at 45% for Commercial Banks and retained at 16% for Merchant Banks.
“Liquidity Ratio (LR): Retained at 30%
“Standing Facilities Corridor: retained at +50 / -450 basis points around the MPR.”
According to the apex bank, the adjustment reflects a measured response aimed at sustaining disinflation momentum while supporting economic activity without undermining price stability.
By retaining other key parameters such as the CRR and Liquidity Ratio, the MPC appears to be adopting a cautious approach — loosening borrowing costs slightly while maintaining tight liquidity controls within the banking system.
Financial market observers say the decision could gradually lower lending rates, improve credit access for businesses, and stimulate investment, though its full impact will depend on inflation dynamics and fiscal policy coordination.
The move aligns with growing expectations that monetary authorities may begin a gradual recalibration of policy as inflation shows early signs of moderation and external pressures ease.
Nigeria’s headline inflation rate declined by 12.51 percentage points year-on-year to 15.1 per cent in January 2026, underscoring a sustained moderation in price pressures across the economy.
Stakeholders in the manufacturing and real sectors have long advocated lower interest rates to reduce financing costs, arguing that elevated borrowing rates have constrained expansion and productivity.
The CBN reiterated its commitment to closely monitoring economic developments and adjusting policy tools as necessary to safeguard macroeconomic stability while supporting sustainable growth.
