CBN Holds Nigeria Policy Rate at 26.5% Amid Inflation Pressure

The Central Bank of Nigeria has held its benchmark interest rate steady, opting for a cautious policy stance amid renewed inflationary pressures linked to global instability. Following its 305th Monetary Policy Committee meeting in Abuja on Wednesday, the bank announced it would retain the Monetary Policy Rate at 26.5 percent.

The committee also voted to keep other key rates unchanged. The asymmetric corridor around the MPR remains at +500/-450 basis points. The cash reserve ratio was held at 45 percent for commercial banks, 16 percent for merchant banks, and 75 percent for non-TSA public sector deposits. All eleven committee members attended the meeting.

Central Bank Governor Olayemi Cardoso stated the decision was based on a comprehensive assessment of risks to the global and domestic economic outlook. He acknowledged that inflation had increased marginally for two consecutive months but characterized the trend as transitory, stemming largely from external shocks. The committee expressed confidence that the current macroeconomic environment is robust enough to support a return to disinflation.

Officials cited spillover effects from the Middle East crisis, which have placed...