CBN cuts interest rate to 26.5% as inflation falls for 11th straight month‎

By Chioma Obinagwam
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‎The Central Bank of Nigeria (CBN) has lowered its benchmark interest rate by 50 basis points to 26.5 percent, citing continued disinflation and stronger macroeconomic fundamentals. 
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‎Confiance News reports that the decision was announced after the 304th meeting of the Monetary Policy Committee (MPC), where members voted to ease policy following signs of sustained price moderation and improved foreign exchange stability. 
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‎Inflation Eases, Reserves Surge
‎Headline inflation slowed to 15.10 percent in January, marking the eleventh consecutive month of decline. Food inflation dropped sharply to 8.89 percent, while core inflation fell to 17.72 percent, driven by lower communication service costs. 
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‎Nigeria’s external reserves climbed to US$50.45 billion, the highest in 13 years, providing nearly 10 months of import cover. The MPC attributed the gains to higher export earnings, remittance inflows, and fiscal reforms, including Presidential Executive Order 09, which channels oil and gas revenues into the Federation Account. 
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‎Banking Sector Resilience
‎The committee also highlighted progress in the ongoing recapitalization program. Of 33 banks raising fresh capital, 20 have already met the new minimum requirement, reinforcing confidence in the sector’s ability to support growth. 
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‎Global Context
‎Globally, economic activity is projected to strengthen in 2026, supported by investments in artificial intelligence and gradual monetary easing. However, risks remain from trade disputes and rising protectionism. 
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‎Outlook
‎The MPC expects Nigeria’s disinflation trend to continue, underpinned by stable exchange rates and improved food supply. However, election-related spending could pose upside risks to inflation. 
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‎The next MPC meeting is scheduled for May 19–20, 2026. 
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