Nigeria Keeps Monetary Policy Unchanged

Nigeria's central bank left its key interest rate steady at 26.50% on May 20, 2026, following a 50 bps rate hike in February. The meeting marked policymakers’ first gathering since the Iran conflict erupted. Governor Olayemi Cardoso said a cautious and vigilant stance was needed to anchor inflation expectations and safeguard macroeconomic stability. Nigeria’s headline inflation climbed for a second month to 15.7% in April, the highest since November, reversing the disinflationary trend observed for 11 consecutive months. The central bank also retained other key monetary parameters. The asymmetric corridor was kept at +50/-450 basis points around the policy rate, while the Cash Reserve Ratio remained at 45% for commercial banks and 16% for Merchant Banks. The liquidity ratio was unchanged at 30%.

Nigeria's central bank trimmed its key interest rate by 50 bps to 26.50% during its February 2026 meeting, after keeping it unchanged at 27% in November last year. The move pushed down borrowing costs to the lowest since mid-2024, aiming to support growth amid moderating inflation. Governor Olayemi Cardoso said that recent data suggested the ongoing disinflation trajectory would continue. He added that the lagged transmission of previous monetary tightening, sustained exchange rate stability and enhanced food supply were helping bring down inflation. Nigeria’s headline inflation rate eased slightly to 15.10% in January 2026 from 15.15% in December, marking the tenth consecutive monthly decline. Meanwhile, policymakers retained key monetary parameters. The asymmetric corridor was kept at +50/-450 basis points around the policy rate, while the Cash Reserve Ratio remained at 45% for Deposit Money Banks and 16% for Merchant Banks. The liquidity ratio was unchanged at 30%.

The Central Bank of Nigeria maintained its benchmark rate at 27% on November 25, 2025, following a 50 bps cut in September, saying the pause was necessary to maintain the progress achieved in ensuring low and stable inflation. Governor Cardoso said the Committee decided by a majority vote to maintain the current policy stance, suggesting that members were not yet convinced economic conditions justified another cut. Policymakers welcomed the continued slowdown in headline inflation, supported by sustained monetary tightening and a more stable exchange rate, but noted it remains high, requiring further policy efforts. Nigeria’s annual inflation rate fell for the seventh straight month to 16.05% in October 2025, the softest since March 2022, from 18.02% in the prior month. The central bank also kept all other rates unchanged but adjusted the corridor around the MPR at +50-450% from +250-250% in September 2025.