In a notable shift of strategy, the Central Bank of Nigeria (CBN) has officially lowered its benchmark interest rate, known as the Monetary Policy Rate (MPR), by 50 basis points. This move brings the rate down to 26.5 percent from its previous 27 percent. The announcement was made by the CBN Governor, Mr. Olayemi Cardoso, following the conclusion of the 304th Monetary Policy Committee (MPC) meeting held in Abuja.
The central bank decided to hold other key parameters steady. The Cash Reserve Requirements (CRR) remain at 45 percent for commercial banks and 16 percent for merchant banks, while the standing facilities corridor was also retained. Governor Cardoso explained that the decision to ease the rate slightly was based on a balanced view of the current economy, which suggests that inflation is on a steady downward path.
The Governor highlighted that headline inflation has now seen a decline for 11 consecutive months as of January 2026. This positive trend is being credited to previous aggressive interest rate hikes, a more stable exchange rate, and an improved supply of food staples. Mr. Cardoso noted that the stability in petrol prices and healthy capital inflows have also played a major role in anchoring the economy and boosting investor confidence.
One of the most impressive highlights shared with Reports is the state of Nigeria’s external reserves. As of February 19, 2026, the gross external reserves climbed to $50.4 billion. This marks a 13-year high and provides enough cushion to finance the country’s imports for more than nine months. The Governor also spoke favorably of the new Presidential Executive Order 09, which redirects oil and gas revenues into the Federation account, further strengthening the nation’s financial buffers.
Turning to the banking sector, the CBN boss provided an update on the ongoing recapitalization exercise. Out of the 33 banks currently working to increase their capital, 20 have already successfully crossed the new minimum threshold. So far, these banks have mobilized a total of N4.05 trillion, with about 71 percent coming from local sources and over 28 percent from foreign investors. Mr. Cardoso assured the public that the banking system remains resilient and that depositors in banks currently under regulatory watch have no reason to panic.
Despite the optimistic outlook, the CBN Governor did wave a flag of caution regarding the near future. He warned that upcoming election spending could potentially disrupt the progress made in controlling inflation. He urged fiscal authorities to maintain a tight balance in their spending to ensure that the hard-earned economic stability is not compromised.
