The Central Bank of Nigeria (CBN) on Tuesday reduced its Monetary Policy Rate (MPR) to 26.5 percent, marking the second cut in five months. The move is designed to support economic growth amid moderating inflation.
The decision was announced by Olayemi Cardoso at the conclusion of the two-day Monetary Policy Committee meeting held in Abuja.
Nigeria’s headline inflation rate eased slightly to 15.10 percent in January 2026, down from 15.15 percent in December 2025, according to the National Bureau of Statistics. This moderation has bolstered expectations that the CBN may continue a gradual easing cycle after months of aggressive monetary tightening.
The latest cut follows a previous reduction in September 2025, when the MPR was lowered from 27.5 percent to 27 percent. Prior to that, the last reduction occurred in September 2020, during the COVID-19 pandemic, when the rate was trimmed from 12.5 percent to 11.5 percent to cushion economic shocks.
Since 2020, the Central Bank had predominantly pursued a tightening stance, raising borrowing costs to combat inflation and currency volatility.
Alongside the rate decision, key monetary parameters were retained: the asymmetric corridor remains at +50/-450 basis points around the MPR; the Cash Reserve Ratio is 45.00 percent for Deposit Money Banks and 16.00 percent for Merchant Banks; and the Liquidity Ratio remains at 30.00 percent.
Analysts at Coronation Merchant Bank said the easing stance could boost fixed-income markets. “This cut may lead to continued yield moderation in the fixed-income space, enhancing the value of current holdings for investors,” they noted.
The rate reduction signals the Monetary Policy Committee’s growing confidence that inflationary pressures are easing, creating space for growth-supportive measures while maintaining its core mandate of price stability.
