The Central Bank of Nigeria (CBN) has adjusted its Monetary Policy Rate (MPR) from 26.5% to 23% during the Monetary Policy Committee (MPC) meeting on September 21-22, 2026. Experts have praised this decision, highlighting it as a positive step.
CBN Governor Olayemi Cardoso announced that the interest rate corridor has been recalibrated to +50/-300 basis points around the MPR. The Cash Reserve Requirement remains at 45% for Deposit Money Banks, 16% for Merchant Banks, and 75% for non-TSA public sector deposits.
The MPC clarified that this adjustment does not indicate a change in their tightening monetary policy stance but aims to enhance the effectiveness of monetary policy transmission. A widening gap between the MPR and prevailing market rates had led to concerns about the efficacy of monetary policy across the economy.
In terms of inflation, the MPC noted that headline inflation decreased to 15.39% in August from 15.43% in July, with food inflation dropping to 19.57%. Core inflation also fell to 13.29%, aided by lower transport and healthcare costs. These trends are attributed to previous monetary tightening and stable exchange rates.
The MPC reported a robust economic outlook, with real GDP growth reaching 4.43% in the second quarter of 2026, up from 3.89% previously. Both the oil and non-oil sectors contributed to this growth, with the oil sector expanding by 7.31%.
The CBN highlighted improvements in Nigeria’s balance of payments, achieving a surplus of $3.51 billion in Q2 2026, compared to $2.38 billion in Q1. Foreign reserves stood at $55.25 billion by September 18, 2026, the highest in 18 years.
Additionally, two initiatives are expected to aid in controlling inflation: the Presidential Initiative on the National Affordable CNG Transit Programme and a new agreement between the Federal Ministry of Finance and the CBN for fiscal-monetary coordination.
Governor Cardoso expressed optimism for continued growth into 2026, supported by improvements in crude oil production and agricultural output, although he cautioned about potential risks from geopolitical tensions and election-related spending.
