Governor of the Central Bank of Nigeria, Olayemi Cardoso | Credit: CBN The Monetary Policy Committee of the Central Bank of Nigeria on Wednesday retained the benchmark interest rate at 26.5 per cent, citing rising external risks, renewed inflationary pressure, and the need to sustain exchange rate stability.
The CBN Governor, Olayemi Cardoso, announced the decision at the end of the committee’s 305th meeting held in Abuja. He said, “The committee’s decision is as follows: retain the monetary policy rate at 26.5 per cent.” The decision also elicited mixed reactions from members of the Organised Private Sector.
They acknowledged the justification for retaining interest rates and, on the other hand, cautioned that high rates hamper private sector investment in SMEs and manufacturing, leading to lower output and hampering job creation. The committee also retained the standing facilities corridor around the MPR at +50/-450 basis points, the Cash Reserve Requirement of Deposit Money Banks at 45 per cent, Merchant Banks at 16 per cent, and non-TSA public sector deposits at 75 per cent.
The decision came after Nigeria’s headline inflation rose for the second consecutive month to 15.69 per cent in April 2026 from 15.38 per cent in March, according to the latest Consumer Price Index report released by the National Bureau of Statistics. Food inflation also increased to 16.06 per cent in April from 14.31 per cent in March, reflecting higher transportation and logistics costs as well as seasonal pressures, while core inflation moderated to 15.86 per cent from 16.21 per cent.
The MPC said the renewed inflationary pressure was largely caused by external shocks, particularly spillovers from the Middle East crisis, which had pushed up global energy prices and logistics costs. However, the committee said the impact on Nigeria had been muted by earlier reforms, including exchange rate stability, improved external reserves, stronger monetary policy transmission, a better-capitalised banking system, and ongoing fiscal consolidation.
It said, “Although inflation has risen marginally for two consecutive months, largely induced by external shocks, the MPC recognised its transitory nature and remained confident that the current macroeconomic environment is sufficiently robust to support a return to disinflation.” Speaking during the post-meeting press briefing, Cardoso said the CBN would sustain its current policy direction, noting that the country had recorded 11 straight months of disinflation before the recent uptick.
“We’ve got to remember that we’ve been coming from 11 straight months of disinflation. And we believe that what we have now is something that has resulted from external shocks,” he said. He added that the apex bank had built buffers to protect the economy, saying Nigeria’s recent sovereign rating upgrade by Standard & Poor’s showed that current policies were moving the economy in the right direction.
According to him, exchange rate stability remains central to the CBN’s inflation-control strategy. “It is key that the centrepiece of our toolkit is ensuring that our foreign exchange rate remains stable,” Cardoso said, adding that the bank would continue to work with fiscal authorities to reduce inflation pass-through.
On the foreign exchange market, the governor dismissed claims that the CBN was aggressively intervening to defend the naira. “The answer is that it’s not true,” he said. “The foreign exchange system has changed considerably.” Cardoso said daily foreign exchange turnover had risen from about $100m when the current administration took office to roughly $550m, with occasional spikes to $1bn.
He said the CBN’s intervention in 2025 was only about 1.2 to 1.3 per cent of total market turnover, adding that the market was increasingly being driven by willing buyers and willing sellers. The governor also said Nigeria’s external reserves remained dynamic and resilient, despite recent concerns over declines in reserve levels.