CBN Holds Interest Rate At 26.5% As MPC Cites Global Risks And Inflation Concerns

The Central Bank of Nigeria (CBN) has retained the country’s benchmark interest rate, the Monetary Policy Rate (MPR), at 26.5 per cent, following the conclusion of the Monetary Policy Committee (MPC) meeting in Abuja.

CBN Governor Olayemi Cardoso, who announced the committee’s decision on Tuesday, said the move reflected the need to balance encouraging domestic economic resilience with the growing risks posed by global geopolitical developments, particularly the renewed tensions in the Middle East.

According to him, although recent structural reforms have helped strengthen Nigeria’s economic outlook, global uncertainties continue to threaten energy prices and inflationary trends.

“The Committee decided as follows: retain the monetary policy rate at 26.5 per cent,” Cardoso announced at the end of the 306th MPC meeting, held in Abuja on July 20 and 21, 2026.

The decision followed extensive deliberations by committee members, who reviewed recent domestic economic performance alongside prevailing international economic conditions before agreeing to maintain the current lending rate.

Other Key Decisions by the MPC

Beyond retaining the benchmark interest rate, the committee also resolved to maintain several other monetary policy parameters.

These include:

• Retaining the Standing Facilities Corridor around the MPR at +50 / -450 basis points.
• Maintaining the Cash Reserve Ratio (CRR) at 45 per cent for Deposit Money Banks and 16 per cent for Merchant Banks.
• Keeping the CRR for non-TSA public sector deposits at 75 per cent.

Why The CBN Maintained the Rate

Explaining the rationale behind the decision, Cardoso noted that while Nigeria recorded a slight moderation in headline inflation in June 2026, global developments remain a major source of concern.

“The committee’s decision to maintain the current policy stand 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.

Despite the external pressures, the CBN Governor expressed confidence in the country’s economic resilience.

Cardoso stated that the Nigerian economy has “remained largely resilient to the external shocks”, attributing the stability to ongoing reforms and policy measures introduced over the past months.

Second Consecutive Hold in 2026

The latest decision marks the second consecutive MPC meeting in 2026 where the Central Bank has chosen to leave the benchmark interest rate unchanged, signalling its cautious approach to managing inflation while supporting economic stability.