CBN cuts interest rates to 26.5% amid cooling inflation

Abdullateef Fowewe

The Central Bank of Nigeria (CBN) has reduced its Monetary Policy Rate (MPR) by 50 basis points to 26.5%, the second such easing in five months, as headline inflation eases to 15.10% in January 2026 from 15.15% in December, per National Bureau of Statistics.

In a statement shared on X, the CBN outlined the Monetary Policy Committee’s (MPC) 304th meeting outcomes, “Monetary Policy Rate (MPR): Reduced by 50 basis points from 27% to 26.5%. Cash Reserve Ratio (CRR): Retained at 45% for Commercial Banks and retained at 16% for Merchant Banks. Liquidity Ratio (LR): Retained at 30%. Standing Facilities Corridor: retained at +50 / -450 basis points around the MPR.”

While the MPR cut aims to stimulate growth, the unchanged 45% CRR for commercial banks continues to limit lending, potentially offsetting stimulus effects but aiding stability as forex reserves hit $35 billion.

The announcement triggered a Naira depreciation to ₦1,344 per USD officially, reversing prior strengthening amid concerns over global oil volatility.