The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate by 50 basis points to 26.5 per cent from 27 per cent.
The decision was taken at the 304th meeting of the Monetary Policy Committee held in Abuja on Tuesday.
CBN Governor Olayemi Cardoso announced the outcome, with 11 members in attendance.
The committee said the decision to cut the benchmark rate was driven by sustained improvements in key macroeconomic indicators, particularly inflation.
Headline inflation declined for the eleventh consecutive month to 15.1 per cent in January 2026, reflecting continued price moderation.
The Cash Reserve Ratio was retained at 45.0 per cent for commercial banks and 16.0 per cent for merchant banks.
The Liquidity Ratio was maintained at 30.0 per cent, while the Standing Facilities Corridor was fixed at +50/-450 basis points around the MPR.
The committee noted that although inflationary pressures are easing, maintaining other policy parameters reflects a cautious stance aimed at safeguarding financial system stability.
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This rate cut represents the lowest benchmark rate since May 2024, when the interest rate stood at 26.25 per cent.
Market analysts had expressed mixed expectations ahead of the MPC meeting, with opinions divided between a rate cut and a hold decision.
Asimiyu Damilare, Head of Research at Afrinvest West Africa, said recent macroeconomic developments had strengthened the case for a potential rate cut.
At its 303rd meeting, the MPC had retained the Monetary Policy Rate at 27 per cent.
The latest decision marks the first rate cut after a prolonged period of aggressive tightening aimed at curbing inflation and stabilising the naira.
The retention of other key policy parameters suggests that the CBN is adopting a gradual approach to monetary easing.
With inflation trending downward and liquidity conditions relatively stable, the committee’s decision indicates a measured shift toward easing while preserving policy safeguards.
