CBN Cuts MPR to 26.5%: Key Reasons Explained

On February 24, 2026, the Central Bank of Nigeria (CBN) reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.5%. This marks the second rate cut by the CBN in a year, as the Monetary Policy Committee aims to combat inflation and maintain monetary stability.

The CBN identified three main reasons for this decision: a continued decline in inflation rates, stabilization of exchange rates, and improved foreign exchange reserves. The inflation rate fell to 15.1% in January 2025, driven by a decrease in food prices due to government policies and a stable exchange rate, which closed at N1,429 in December 2025.

Additionally, the CBN noted the relative stabilization of petroleum product prices and the impact of Dangote Refinery on fuel costs. The external sector showed robust performance, with foreign exchange reserves rising to $48 billion in February 2026, the highest level in 13 years, supported by increased remittances and export earnings.