Committee cites inflation risks, global uncertainty, and need for macroeconomic stability despite confidence in ongoing reforms…..
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 26.5 percent, signaling a continued cautious stance as authorities seek to keep inflation under control and preserve macroeconomic stability.
CBN Governor Olayemi Cardoso announced the decision on Wednesday at the end of the committee’s 305th MPC meeting held in Abuja.
According to Cardoso, all 11 MPC members attended the meeting where they reviewed recent developments in both the global and domestic economy, assessed inflation trends, and examined near- to medium-term economic risks.
In addition to retaining the benchmark interest rate, the committee also left other key monetary parameters unchanged.
The MPC retained the asymmetric corridor around the MPR at +50/-450 basis points, while maintaining the Cash Reserve Ratio (CRR) for deposit money banks at 45 percent and merchant banks at 16 percent.
The committee also retained the CRR for non-TSA public sector deposits at 75 percent.
Cardoso explained that the MPC’s decision was based on what he described as a “comprehensive assessment of risks to the outlook.”
The latest decision comes shortly after the National Bureau of Statistics reported that Nigeria’s headline inflation rate rose slightly to 15.38 percent in March 2026 from 15.06 percent recorded in February.
Despite the recent uptick, the CBN governor said the committee believes the inflationary trend remains temporary and largely linked to external pressures rather than domestic structural deterioration.
Although inflation has now increased for two consecutive months, Cardoso expressed confidence that the broader macroeconomic environment remains strong enough to support a return to disinflation.
“The MPC recognises its transitory nature and remains confident that the current macroeconomic environment is sufficiently robust to support a return to disinflation,” he stated.
The apex bank governor also pointed to rising geopolitical tensions in the Middle East as one of the major external factors influencing inflation globally.
According to him, the ongoing crisis has continued to place upward pressure on global energy prices, transportation costs, and logistics expenses.
However, Cardoso argued that the impact on Nigeria has so far remained relatively limited due to reforms already implemented by monetary and fiscal authorities.
He highlighted several factors that have helped strengthen the economy’s resilience, including improved exchange rate stability, stronger external reserves, enhanced monetary policy transmission, ongoing fiscal consolidation, and a better-capitalised banking sector.
“These reforms have significantly bolstered the economy’s ability to absorb external shocks,” Cardoso said.
He added that the reforms have also helped reduce the extent to which global commodity and energy price increases feed directly into domestic inflation.
“As a result, the pass-through of global commodity and energy price shocks to domestic inflation has been significantly mitigated,” he noted.
The committee also welcomed Nigeria’s recent sovereign credit rating upgrade, describing it as evidence of improving investor confidence and stronger macroeconomic fundamentals despite continued external challenges.
According to Cardoso, the rating upgrade reinforces confidence in Nigeria’s ongoing economic reform agenda and policy direction.
He stressed that the MPC remains committed to maintaining a disciplined monetary policy framework capable of anchoring inflation expectations and sustaining economic stability.
“Members were therefore of the view that a cautious and vigilant policy stance is necessary to anchor inflation expectations and safeguard macroeconomic stability,” he said.
The CBN governor further disclosed that the committee expressed satisfaction with the successful conclusion of the banking sector recapitalisation exercise, describing it as another positive signal for the stability of Nigeria’s financial system.
The latest MPC decision suggests that the Central Bank remains focused on balancing inflation control with broader economic stability as Nigeria navigates both domestic reforms and increasing global economic uncertainty.
The next meeting of the Monetary Policy Committee is scheduled for July 20th and 21st, where policymakers are expected to reassess inflation trends, exchange rate stability and broader global economic developments.
