Rising Inflation Forces CBN to Hold Interest Rate at 26.5%

Rising Inflation Forces CBN to Hold Interest Rate at 26.5%

The Central Bank of Nigeria has retained the country’s benchmark interest rate at 26.5 per cent as monetary authorities move cautiously in response to renewed inflationary pressure in the economy.

Governor of the apex bank, Olayemi Cardoso, announced the decision on Wednesday at the end of the 305th meeting of the Monetary Policy Committee held in Abuja.

“The Committee’s decision is as follows: retain the Monetary Policy Rate at 26.5 per cent,” Cardoso stated.

The decision signals a pause in the Central Bank’s easing cycle after the MPC approved a 50-basis-point reduction in February 2026, the first rate cut after months of aggressive monetary tightening aimed at taming inflation and stabilising the foreign exchange market.

Analysts said the MPC’s latest stance reflects concerns over the recent uptick in inflation, despite earlier signs of moderation in consumer prices.

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According to the latest Consumer Price Index report released by the National Bureau of Statistics, Nigeria’s headline inflation rate rose to 15.69 per cent in April 2026 from 15.38 per cent recorded in March, representing a 0.31 percentage-point increase.

The increase has raised concerns among policymakers over persistent price pressures driven by food costs, energy prices, transportation expenses and exchange rate volatility.

The Monetary Policy Rate serves as the benchmark for lending rates across the banking sector and plays a critical role in determining borrowing costs for businesses and consumers.

Since assuming office, Cardoso and the current MPC have maintained a tight monetary policy stance to rein in inflation, attract foreign portfolio inflows and restore investor confidence in the Nigerian economy following sweeping foreign exchange reforms and broader macroeconomic adjustments by the Federal Government.

Economic experts believe the decision to retain the rate reflects the CBN’s attempt to balance inflation control with the need to support economic growth and private sector investment.

The committee’s decision is also expected to influence yields in the fixed-income market, banking sector lending rates and overall investor sentiment in the coming months.

 

Rising Inflation Forces CBN to Hold Interest Rate at 26.5%