MPC’s modest rate cut sends positive signal – OPS

The Monetary Policy Committee of the Central Bank of Nigeria has reduced the benchmark interest rate to 26.5 per cent, a move members of the Organised Private Sector described as minimal but a positive signal for businesses and the broader economy.

At the end of its 304th meeting in Abuja, the MPC cut the Monetary Policy Rate by 50 basis points from 27 per cent to 26.5 per cent. All 11 members of the committee were in attendance.

The CBN Governor, Olayemi Cardoso, announced the decision on Tuesday. “The committee decided to reduce the monetary policy rate by 50 basis points to 26.5 per cent,” Cardoso said.

He added that the MPC also resolved to “retain the Standing Facilities Corridor around the MPR at +50/-450 basis points” and to “retain the Cash Reserve Requirement for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and 75.00 per cent for non-TSA public sector deposits.”

The latest move marks the second rate cut under the current leadership of the apex bank, following a similar 50-basis-point reduction in September 2025 and a hold at the November 2025 meeting.

Cardoso said the decision was based on “a balanced evaluation of risks to the outlook,” which indicates that “the ongoing disinflation trajectory would continue, largely supported by the lagged transmission of previous monetary tightening, sustained exchange rate stability, and enhanced food supply.”

He disclosed that headline inflation eased to 15.10 per cent in January 2026 from 15.15 per cent in December 2025, marking the eleventh consecutive month of year-on-year decline. According to him, “Food inflation declined markedly to 8.89 per cent from 10.84 per cent,” while “core inflation declined to 17.72 per cent from 18.63 per cent.”