The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday retained the Monetary Policy Rate (MPR) at 26.5% at the conclusion of its 306th meeting, opting to hold its benchmark lending rate steady.
Along the MPR, the Committee also retained the Standing Facilities Corridor at +50 / -450 basis points around the MPR, maintaining the band within which banks can borrow from or deposit funds with the apex bank.
The MPC further held the Cash Reserve Ratio (CRR) unchanged across all categories of financial institutions, keeping it at 45% for Deposit Money Banks, 16% for Merchant Banks, and 75% for non-TSA (Treasury Single Account) public sector deposits.
The eleven members in attendance voted to retain all key policy parameters, citing global uncertainties linked to renewed hostility in the Middle East.
CBN Governor, Olayemi Cardoso, who announced the Committee’s decision shortly after the MPC meeting in Abuja, said it followed a thorough assessment of the balance of risks.
He said although headline inflation moderated marginally in June 2026, global uncertainties have heightened mainly due to renewed hostilities in the Middle East, making a cautious monetary policy stance appropriate.
The Committee noted that the Nigerian economy has remained largely resilient to external shocks stemming from the Middle East crisis, reflecting gains from earlier fiscal and monetary reforms, though he said maintaining the current stance would allow policymakers to monitor incoming data and the inflation trajectory.
The MPC also acknowledged the Federal Government’s renewed commitment to policy coordination, underscored potential benefits from the Executive Order 9, and commended government efforts to improve crude oil production while encouraging stronger reforms in other sectors such as solid minerals.
It further welcomed positive outcomes from the banking sector recapitalisation exercise but urged continued surveillance to safeguard financial stability.
On price developments, headline inflation eased to 15.91% year-on-year in June 2026 from 15.93% in May, as a decline in the non-food component offset rising food inflation, which climbed to 17.52% from 16.96%.
Core inflation moderated to 15.92% from 16.82%, aided by exchange rate stability, while the 12-month average inflation rate fell to 17.63% from 18.36%, marking six consecutive months of moderation. Month-on-month headline inflation slowed to 1.66% from 1.75%.
Real GDP grew 3.89% in the first quarter of 2026, down slightly from 4.07% in the previous quarter, driven by resilience in the non-oil sector, which expanded 3.94% on gains in telecommunications, financial services, trade and transportation.
Oil sector GDP growth slowed to 2.57% from 6.79% in the fourth quarter of 2025 due to maintenance of oil facilities, though the Composite Purchasing Managers Index rose to 50.1 points in June 2026 from 49.6 in May. Gross external reserves rose $52.52 billion as of July 17, 2026, $50.47 billion at May-end, sufficient to cover about 11 months of imports.
On global outlook, the Committee noted growth is expected to slow to 3.0% in 2026 from 3.5% in 2025, amid geopolitical tensions, trade policy uncertainty and tight fiscal conditions, with inflation risks tilted upward due to rising commodity prices and supply disruptions.
Looking ahead, the MPC projected resilient output growth in 2026, supported by improved crude production and expansionary PMI readings, and forecasts further inflation moderation on continued exchange rate stability and improved food supply as the harvest season approaches. However, it flagged the severe and prolonged escalation of the Middle East conflict as the key risk to the outlook, reaffirming its commitment to price and financial system stability.
