By Nchetachi Chukwuajah
The Central Bank of Nigeria (CBN) has cut the Monetary Policy Rate (MPR) or interest rate by 50 basis points (bps) to 26.50 per cent from 27 per cent in September 2025.
The CBN announced this during its 304th Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday, February 24.
The February 2026 rate cut is the lowest since May 2024, when the interest rate stood at 26.25 per cent
The MPC’s decision follows a drop in Nigeria’s inflation rate to 15.10 per cent in February 2026, according to the National Bureau of Statistics (NBS).
Speaking after the MPC meeting, CBN Governor, Olayemi Cardoso, said all members of the MPC unanimously agreed on the decision.
“The committee decided to reduce the monetary policy rate by 50 basis points to 26.50 per cent,” he said.
Cardoso stated that the liquidity ratio was maintained at 30 per cent, and the standing facilities corridor was adjusted to +50 to -450 basis points around the monetary policy rate.
He said the committee retained the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks and 16 per cent for merchant banks, while the 75 per cent CRR on non-TSA public sector deposits was equally maintained.
Cardoso said: “The cash reserve ratio (CRR) is retained at 45 per cent for DMBs and 16 per cent for merchant banks, respectively, and 75 per cent for Non-TSA public sector deposits.
“Liquidity ratio (LR) remained unchanged at 30 per cent and the asymmetric corridor retained by +50/-450 basis points around the MPR.”
The CBN governor further said the rate cut followed a balanced evaluation, which suggested that the ongoing disinflation trend would continue and the sustained 11th consecutive month of inflation decline.
“The committee’s decision was premised on a balanced evaluation of risk to the outlook, which suggests that the ongoing disinflation trajectory would continue, largely supported by the lag transmission of previous monetary tightening, sustained exchange rate stability, and enhanced food supply.
“In reaching this policy decision, the committee took into account the sustained deceleration in year-on-year headline inflation in January 2026, marking the 11th consecutive month of decline.
“This downward trajectory in inflation was driven mainly by the continued effect of the contractionary monetary policy, stability in the foreign exchange market, robust capital inflows, and improvements in the balance of payments,” he said..
Cardoso stated that the MPC noted the remarkable performance of Nigeria’s external sector, attributing the improvement to the higher export earnings and increased remittance inflows.
“This has contributed to greater stability in the foreign exchange market and bolstered investor confidence.
“Members also welcomed the newly issued Presidential Executive Order 09, which redirects oil and gas revenues into the federation account,” he added.
