CBN Holds Interest Rate at 26.5% as MPC Sees Inflation as Temporary
By Aboki Forex —
The Monetary Policy Committee of the Central Bank of Nigeria has retained the benchmark interest rate at 26.5% after its 305th meeting in Abuja. The decision was announced on Wednesday, May 20, 2026, by CBN Governor Olayemi Cardoso.
The committee believes the recent rise in inflation is temporary and expects inflation to slow down again despite external economic shocks. Cardoso said the MPC assessed risks to the outlook and recognised the transitory nature of the current price pressures.
Inflation Edges Up to 15.69%
The decision followed an increase in Nigeria’s inflation rate to 15.69% in April 2026, up from 15.38% in March. The National Bureau of Statistics attributed the rise mainly to higher fuel prices and global tensions.
Geopolitical conflicts involving the United States, Israel, and Iran since February disrupted crude oil shipments through the Strait of Hormuz, pushing up fuel costs. Cardoso said the impact on Nigeria was limited due to earlier economic reforms.
Other Rates Held Steady
The MPC also kept the Cash Reserve Ratio at 45% for commercial banks and 16% for merchant banks. Non-Treasury Single Account public sector deposits will continue to attract a 75% CRR. The standing lending and deposit facility corridor remains at +50 and -450 basis points around the MPR.
The rate hold follows a 50 basis point cut in February 2026 and a similar hold during the November 2025 MPC meeting.
Reforms Buffer Economy
Cardoso said measures such as improved exchange rate stability, stronger external reserves, tighter monetary policy, a resilient banking sector, and ongoing fiscal reforms have helped strengthen the economy against external shocks. These policies have also reduced the extent to which global price increases affect domestic inflation.
Meanwhile, the CBN recently relaxed its cashless policy on Personal Travel Allowance and Business Travel Allowance. From June 1, 2026, travellers can receive 25% of their allowance in cash dollars, with the remaining 75% processed electronically.