CBN holds interest rate at 26.5%
CBN
Nike Popoola
The Central Bank of Nigeria (CBN) has maintained its benchmark interest rate at 26.5 per cent, underscoring its cautious approach to monetary policy despite a slight easing in inflation.
Announcing the outcome of the 306th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, CBN Governor Olayemi Cardoso said members opted to retain key policy parameters after assessing developments in the domestic and global economy.
This is the second consecutive meeting at which the apex bank has left the Monetary Policy Rate (MPR) unchanged following its reduction earlier in the year.
The committee also retained the Cash Reserve Ratio at 45 per cent for commercial banks and 16 per cent for merchant banks, while non-Treasury Single Account public sector deposits remain at 75 per cent.
In a move aimed at stimulating lending, the MPC adjusted the asymmetric corridor around the MPR to +50/-450 basis points. Analysts say the measure is expected to make it less attractive for banks to keep excess funds with the CBN and encourage greater credit flow to businesses.
Cardoso noted that while inflation showed modest improvement in June, concerns over geopolitical tensions and their potential impact on the global economy influenced the committee’s decision to maintain its current stance.
Nigeria’s headline inflation rate stood at 15.91 per cent in June, according to the National Bureau of Statistics.
The CBN maintained that the Nigerian economy has continued to withstand external pressures, even as policymakers remain vigilant over emerging global and domestic risks.
