Quick Reads:
- MPR held at 26.5% for the second consecutive time
- Decision follows the 306th MPC meeting held in Abuja, 20–21 July
- Headline inflation eased slightly to 15.91% in June
- Renewed US-Iran hostilities near the Strait of Hormuz threaten oil prices
- CRR for commercial banks stays at 45%
The Central Bank of Nigeria (CBN) has again retained its benchmark interest rate at 26.5 per cent, as the apex bank continues to tread carefully amid renewed global inflation risks. This marks the second time in a row that CBN has retained the interest rate at this level, following a 50-basis-point cut back in February from 27 per cent.
CBN Governor, Olayemi Cardoso, announced the decision on Tuesday at the close of the bank’s two-day, 306th Monetary Policy Committee (MPC) meeting held in Abuja. According to Cardoso, the committee’s resolution to hold the rate came after weighing several economic indicators, including the fresh wave of instability rocking the Middle East.
“The MPC decision followed a thorough assessment of the balance; although headline inflation moderated marginally in June 2026, it has heightened due to renewed hostilities in the Middle East,” Cardoso said.
Nigeria’s headline inflation had eased marginally to 15.91 per cent in June, a slight dip from the 15.93 per cent recorded in May, data from the National Bureau of Statistics shows. That relief followed months of steady increases, with inflation climbing from 15.38 per cent in March to 15.69 per cent in April, largely driven by the escalation of Middle East hostilities that pushed global oil prices higher.
A brief ceasefire had helped cool prices and support June’s slower inflation figure, but fresh clashes involving the United States and Iran around the Strait of Hormuz have reignited concerns over global energy costs, adding a layer of uncertainty to Nigeria’s economic outlook.
Beyond the headline rate, the MPC also adjusted the asymmetric corridor around the MPR to +50/-450 basis points, a move designed to discourage banks from parking funds idly with the CBN and instead push more credit into the real economy. The Cash Reserve Ratio (CRR) for commercial banks was left unchanged at 45 per cent, while merchant banks retain a CRR of 16 per cent. The CRR on non-TSA public sector deposits also stays at 75 per cent for liquidity management purposes.
With the CBN retaining the interest rate at 26.5 per cent, analysts say the bank is signalling that it isn’t ready to loosen policy just yet, choosing instead to keep a watchful eye on how the Middle East conflict plays out and its potential ripple effects on oil prices, the naira, and domestic inflation.
