The Central Bank of Nigeria has retained the Monetary Policy Rate (MPR) at 26.5 per cent as policymakers adopted a cautious stance to tackle inflationary pressures and safeguard macroeconomic stability.
The decision was announced at the end of the 305th meeting of the Monetary Policy Committee (MPC), held in Abuja on May 19 and 20, 2026, under the leadership of CBN Governor, Olayemi Cardoso.
The Committee also retained the Standing Facilities Corridor at +50/-450 basis points around the MPR, while leaving the Cash Reserve Requirement (CRR) unchanged at 45 per cent for Deposit Money Banks, 16 per cent for Merchant Banks, and 75 per cent for non-TSA public sector deposits.
According to the MPC, the decision followed a comprehensive assessment of domestic and global economic developments, with members expressing confidence that recent inflationary pressures remain temporary despite two consecutive months of marginal increases in headline inflation.
The Committee noted that geopolitical tensions arising from the Middle East crisis had pushed up global energy prices, transportation costs and logistics expenses. However, it stated that the Nigerian economy had been largely shielded from severe shocks due to earlier policy reforms, including exchange rate stabilisation, stronger external reserves, improved monetary policy transmission, fiscal consolidation and a well-capitalised banking system.
The MPC said these reforms had significantly reduced the transmission of global commodity and energy price shocks into domestic inflation, maintaining that conditions necessary for price stability remained firmly in place.
Members of the Committee also welcomed Nigeria’s recent sovereign credit rating upgrade, describing it as evidence of strengthening macroeconomic fundamentals and growing confidence in the country’s reform agenda and policy credibility.
The Committee further commended the successful completion of the banking sector recapitalisation exercise, which resulted in the emergence of 33 stronger banks with improved financial soundness indicators. It, however, urged the apex bank to remain vigilant against potential post-recapitalisation risks in order to preserve financial system stability.
On inflation, the MPC disclosed that headline inflation rose marginally to 15.69 per cent in April 2026 from 15.38 per cent in March, largely driven by food prices. Food inflation increased to 16.06 per cent from 14.31 per cent due to higher transportation and logistics costs as well as seasonal factors.
Core inflation, however, moderated to 15.86 per cent in April from 16.21 per cent in March, while the 12-month average inflation rate declined for the sixth consecutive month to 19.16 per cent from 20.05 per cent.
Month-on-month inflation also eased significantly to 2.13 per cent in April, compared to 4.18 per cent recorded in March, indicating moderation in both food and core inflationary pressures.
The Committee noted that Nigeria’s economy continued to show resilience, with real Gross Domestic Product (GDP) growing by 4.07 per cent in the fourth quarter of 2025, up from 3.98 per cent in the preceding quarter.
Growth in the non-oil sector rose to 3.99 per cent, driven mainly by activities in information and communication as well as transportation and storage services, while the oil sector expanded by 6.79 per cent due to improved refining activities in the downstream petroleum sector.
The MPC also highlighted the strength of the country’s external reserves, which stood at $49.49 billion as of May 15, 2026, compared to $48.35 billion at the end of March. The reserves were said to provide import cover for about 9.04 months of goods and services, reinforcing investor confidence and supporting exchange rate stability.
On the global outlook, the Committee projected slower global growth in 2026 amid geopolitical tensions, energy market disruptions and tighter financial conditions. It also warned that elevated energy and agricultural commodity prices, alongside supply chain disruptions, could sustain inflationary pressures globally.
The MPC stated that most central banks across advanced and emerging economies were maintaining cautious, data-driven monetary policies in response to persistent inflation risks.
Looking ahead, the Committee projected that Nigeria’s economic growth would remain resilient in 2026 despite downside risks linked to the Middle East conflict. It added that inflation was expected to rise moderately in the short term before gradually returning to a disinflation path, supported by previous monetary tightening measures, exchange rate stability and improved food supply.
Reaffirming its commitment to price stability and financial system resilience, the MPC said it would continue to pursue a forward-looking and evidence-based monetary policy framework.
The Committee announced that its next meeting is scheduled for July 20 and 21, 2026, in Abuja.
