By Abubakar Yunusa
The Central Bank of Nigeria on Tuesday slashed the Monetary Policy Rate from 27 per cent to 26.5 per cent, signalling a cautious shift in its tightening stance as inflation continues to ease.
The decision was announced in Abuja at the end of the 304th meeting of the Monetary Policy Committee.
Addressing journalists, the CBN Governor, Olayemi Cardoso, said members unanimously voted to cut the benchmark interest rate by 50 basis points.
The latest reduction is the lowest level recorded since May 2024, when the rate stood at 26.25 per cent.
The MPR serves as the baseline lending rate in the economy and influences other interest rates.
The move follows a drop in Nigeria’s inflation rate to 15.1 per cent in February 2026, marking the 11th consecutive month of deceleration in headline inflation.
Cardoso said the committee retained the Cash Reserve Ratio at 45 per cent for Deposit Money Banks and 16 per cent for merchant banks. The CRR for non-TSA public sector deposits remains 75 per cent.
The Liquidity Ratio was left unchanged at 30 per cent, while the asymmetric corridor was retained at +50/-450 basis points around the MPR.
He said the decision was based on a balanced assessment of risks, noting that the disinflation trend was expected to continue, supported by exchange rate stability and improved food supply.
However, the governor warned that increased fiscal injections, particularly election-related spending, could pose upside risks to inflation.
Cardoso also disclosed that Nigeria’s gross external reserves rose to $50.45bn as of February 16, 2026 — the highest level in 13 years.
He attributed the growth to stronger export earnings, improved remittance inflows and sustained foreign exchange stability.
According to him, robust capital inflows and a stronger balance of payments have helped anchor market expectations.
Reacting to the development, a market analyst at FXTM, Mathew Anthony, described the rate cut as a positive signal for the economy.
He said although some investors anticipated a 100-basis-point reduction, the 50-point cut reflects a measured but dovish approach by the apex bank.
Anthony added that cooling inflation, a firmer naira and rising reserves created room for policy easing.
He noted that the move could boost investor confidence ahead of the fourth quarter GDP report expected later this month.
The next MPC meeting is scheduled to hold on May 19 and 20, 2026.
