CBN Holds Interest Rate at 26.5% Amid Inflation Rise
Nigeria’s Central Bank has opted to hold its benchmark lending rate steady at 26.5 per cent, resisting pressure from a fresh uptick in inflation and global economic uncertainty that analysts say tilted the policy balance firmly toward caution.
CBN Governor Olayemi Cardoso announced the decision on Wednesday at the conclusion of the 305th meeting of the Monetary Policy Committee, held on May 19 and 20, 2026, at the apex bank’s headquarters in Abuja.
“The Committee’s decision is as follows: retain the monetary policy rate at 26.5 per cent,” Cardoso stated.
The hold follows the MPC’s 50 basis point rate cut in February 2026, when the committee lowered the benchmark rate from 27 per cent to 26.5 per cent, citing a balanced evaluation of risks and sustained exchange rate stability. That cut was only the second easing move since 2020, having followed an earlier 50 basis point reduction in September 2025.
The latest decision to hold comes against the backdrop of a renewed rise in consumer prices. According to the National Bureau of Statistics, Nigeria’s headline inflation climbed to 15.69 per cent in April 2026, up from 15.38 per cent in March 2026, representing a 0.31 percentage point increase that analysts say complicated the case for further easing.
CBN Governor Cardoso had, in an interview with the Financial Times, noted that rising geopolitical tensions in the Middle East involving the United States, Israel and Iran could influence Nigeria’s interest rate decisions, warning that the conflict triggered capital outflows from frontier and emerging markets, particularly across Africa, while contributing to renewed inflationary pressures globally.
Of the 19 major central banks that held policy meetings since the conflict escalated, about 14, representing 74 per cent, maintained rates, including the US Federal Reserve, Bank of England and the European Central Bank, while only four, representing 21 per cent, opted for rate cuts. The CBN’s decision aligns Nigeria with the dominant global posture of watchful restraint.
The Centre for the Promotion of Private Enterprise had, ahead of the meeting, cautioned the CBN against further tightening, warning that Nigeria’s economic environment remains too fragile to absorb additional pressure. A CBN survey conducted ahead of the meeting also found that 63.3 per cent of Nigerians want interest rates reduced.
At the February meeting, the MPC retained the asymmetric corridor around the MPR at plus 50 and minus 450 basis points, the Cash Reserve Requirement at 45 per cent for Deposit Money Banks, 16 per cent for Merchant Banks, and 75 per cent for non TSA public sector deposits. Those parameters were expected to remain unchanged following Wednesday’s hold decision.
The next MPC meeting is scheduled for July 20 and 21, 2026, where policymakers will assess whether easing conditions have stabilised enough to resume the cautious rate reduction cycle begun last year.