“CBN Retains Interest Rate At 26.5%” — Cites Inflation, Middle East Risks

The Monetary Policy Committee of the Central Bank of Nigeria has retained the country’s benchmark interest rate at 26.5 per cent, citing the need to balance improving domestic economic indicators against inflationary risks arising from heightened global geopolitical tensions.

CBN Governor Olayemi Cardoso announced the decision on Tuesday at the conclusion of the committee’s 306th meeting held in Abuja from July 20 to 21, 2026.

Cardoso said members reviewed recent developments in the domestic and global economies before unanimously deciding to maintain the prevailing monetary policy stance.

“The committee decided as follows: retain the monetary policy rate at 26.5 per cent,” he said.

The committee also retained the Standing Facilities Corridor around the Monetary Policy Rate at +50 and -450 basis points.

The Cash Reserve Ratio for Deposit Money Banks was maintained at 45 per cent, while the ratio for merchant banks remained at 16 per cent.

The MPC equally retained the Cash Reserve Ratio on non-Treasury Single Account public-sector deposits at 75 per cent.

Cardoso explained that the committee’s decision followed a careful assessment of the risks facing the economy, including renewed hostilities in the Middle East and their potential effect on global energy prices, inflation and financial stability.

“The committee’s decision to maintain the current policy stance follows a thorough assessment of the balance of risk. Although headline inflation moderated marginally in June 2026, global uncertainties have heightened due mainly to the renewed hostilities in the Middle East,” he said.

The CBN governor maintained that the Nigerian economy had remained largely resilient to external shocks, attributing the development partly to structural reforms and measures introduced to strengthen macroeconomic stability.

The decision marks the second consecutive time the MPC has retained the benchmark rate at 26.5 per cent.

The committee had reduced the MPR by 50 basis points from 27 per cent to 26.5 per cent in February 2026 before leaving it unchanged at its May meeting.

The latest decision came days after the National Bureau of Statistics reported that Nigeria’s headline inflation rate declined marginally to 15.91 per cent in June, from 15.93 per cent recorded in May.

The 0.02 percentage-point decline represented the first reduction in the headline inflation rate in three months.

Despite the slight moderation, the MPC maintained a cautious position, signalling that borrowing conditions would remain tight while the apex bank monitors inflation, global energy prices, foreign-exchange developments and other risks to the Nigerian economy.

Cardoso reaffirmed the CBN’s commitment to closely monitoring economic data, maintaining price stability and protecting the resilience of the banking sector amid continuing domestic reforms and global uncertainties.

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