Nigeria's Central Bank Cuts Interest Rate to 26.5%

On Tuesday, Nigeria's Central Bank reduced the monetary policy rate by 50 basis points to 26.5%, a move smaller than expected. This decision was made by the Monetary Policy Committee (MPC) and reflects a balancing act regarding inflation risks, as inflation is projected to slow further.

Central Bank Governor Olayemi Cardoso stated that the cut aims to enhance food supply and stabilize exchange rates. Analysts predict that the Central Bank may implement further cuts totaling 750 basis points by the end of the year, potentially lowering the policy rate to 19%.

President Bola Tinubu's economic reforms, initiated in 2023, aim to improve public finances and stimulate economic growth. The Central Bank retained an asymmetric corridor around the monetary policy rate and maintained the cash reserve ratio for commercial banks at 45%.

The latest inflation reading was 15.10% as of January 2026, indicating easing price pressures.