CBN Retains Interest Rate at 26.5% Amid Persistent Inflation Concerns

The Central Bank of Nigeria has retained the Monetary Policy Rate at 26.5% as policymakers intensify efforts to curb inflation and maintain macroeconomic stability amid rising consumer prices and continued pressure on the economy.

By Folarin Aluko

Nigeria’s apex bank has maintained its benchmark interest rate at 26.5%, signaling continued caution over inflationary pressures and broader economic stability concerns.

At the end of its 305th Monetary Policy Committee (MPC) meeting held on May 19 and 20, the Central Bank of Nigeriaannounced that all major monetary policy parameters would remain unchanged as policymakers continue efforts to manage inflation and stabilize the economy.

CBN Governor Olayemi Cardoso disclosed that the committee unanimously voted to retain the Monetary Policy Rate (MPR) at 26.5%, while also maintaining the asymmetric corridor around the MPR at +50/-450 basis points.

The committee further retained the Cash Reserve Ratio (CRR) for Deposit Money Banks at 45%, Merchant Banks at 16%, and 75% for non-TSA public sector deposits. The Liquidity Ratio also remains fixed at 30%.

According to the apex bank, the decision reflects growing concerns over renewed inflationary pressures after recent data showed a slight increase in the country’s headline inflation rate.

Figures released by the National Bureau of Statistics showed that Nigeria’s inflation rate rose from 15.38% in March 2026 to 15.69% in April 2026, marking the second consecutive monthly increase after earlier signs of moderation.

The MPC noted that while inflation had shown signs of easing at the start of the year, recent developments indicate that price pressures remain a significant risk to economic stability.

The latest decision comes months after the committee reduced the MPR from 27% to 26.5% during its February 2026 meeting — the first rate cut after a prolonged period of aggressive monetary tightening aimed at controlling inflation and supporting the naira.

Analysts say the decision to hold rates steady suggests the CBN is attempting to strike a delicate balance between curbing inflation, maintaining exchange-rate stability, and avoiding further pressure on businesses already grappling with high borrowing costs.

Higher interest rates generally make loans more expensive for businesses and consumers, slowing spending and helping to reduce inflation. However, prolonged high rates can also limit investment, reduce consumer demand, and slow economic growth.

The MPC’s latest move indicates that policymakers remain focused on preventing inflation from accelerating further while closely monitoring domestic and global economic conditions.

With inflation still above comfortable levels and the cost of living remaining a major concern for many Nigerians, financial markets and businesses are expected to keep a close watch on the CBN’s next policy direction in the months ahead.