Naira holds firm at N1,373.34/$ as CBN keeps interest rate at 26.5%

The naira showed resilience on Wednesday, closing at N1,373.34 per dollar in the official foreign exchange market. This came after the Central Bank of Nigeria (CBN) left its benchmark interest rate unchanged at 26.5%.

CBN retains all rates

The Monetary Policy Committee (MPC) held its two-day meeting and kept all key parameters steady. The Monetary Policy Rate stayed at 26.5%. The asymmetric corridor remained at +50/-450 basis points. The Cash Reserve Ratio for deposit money banks remained at 45%, while merchant banks kept a 16% CRR. The liquidity ratio stayed at 75%.

CBN Governor Olayemi Cardoso said the decision was based on a careful review of domestic and global risks. He cited geopolitical tensions in the Middle East that continue to affect energy prices and supply chains. Despite inflation rising for two straight months, Cardoso said the MPC sees current price pressures as temporary. He expects disinflation to resume in the coming months.

Naira gains slightly at official market

Data from the CBN showed the naira appreciated by 53 kobo at the Nigerian Foreign Exchange Market (NFEM). It closed at N1,373.34 per dollar on Wednesday, compared to N1,373.87 on Tuesday.

Trading activity dropped. Turnover at the NFEM window fell by 18.65% to $286.03 million, down from $351.60 million the previous day. The number of completed deals remained unchanged at 261 transactions.

In the interbank market, the number of deals rose from 76 to 112 transactions. But total turnover dipped slightly to $68.02 million from $72.42 million.

At the parallel market, the naira weakened marginally by N5 to close at N1,395 per dollar. This widened the gap between the official and unofficial rates to N22.

External reserves hit $49.49 billion

Cardoso disclosed that gross external reserves climbed to $49.49 billion as of May 15, 2026. That is up from $48.35 billion at the end of March. He said the reserve position now provides more than nine months of import cover. This strengthens Nigeria's ability to withstand external shocks and supports ongoing foreign exchange reforms.

“Available evidence indicates that the impact of the crisis on the Nigerian economy has been largely muted due to the benefits of prior policy reforms,” Cardoso stated.

Analysts react

Economists said the MPC's decision was widely expected. Razia Khan described the move as unsurprising. She noted that policymakers are betting on inflation easing over time. But she warned that inflation risks remain high, especially with potential fiscal pressures ahead of Nigeria's election cycle.

Bismarck Rewane said Nigeria's macroeconomic position has improved considerably. Stronger reserves, better oil prices, and ongoing reforms are driving this. He added that the country is now in a better position to maintain a “stable, predictable and well-managed exchange rate.”

The MPC praised recent economic reforms, including exchange rate stabilisation measures, banking sector recapitalisation, and fiscal consolidation. The committee said these reforms have improved Nigeria's ability to absorb external shocks and reduced the impact of rising global commodity prices on domestic inflation.

The committee also welcomed Nigeria's recent sovereign rating upgrade by S&P Global Ratings. It described the upgrade as evidence of strengthening macroeconomic fundamentals and growing policy credibility.

Analysts believe the latest policy decisions aim to preserve investor confidence, attract foreign inflows, and sustain stability in the foreign exchange market amid persistent global headwinds.