The Central Bank of Nigeria has reduced its benchmark interest rate by 50 basis points to 26.5 per cent, citing a steady decline in inflation and improved stability in the foreign exchange market.

The decision was announced on Tuesday by the Governor of the CBN, Olayemi Cardoso, after the Monetary Policy Committee (MPC) held its 304th meeting on 23 and 24 February 2026.

All the 11 members of the committee attended the meeting.

This is the first time the bank cut rates since September, when it reduced the Monetary Policy Rate (MPR) to 27 per cent. The move followed three consecutive meetings where rates were left unchanged.

With the latest decision, the MPR now stands at 26.5 per cent. The committee also kept other policy measures unchanged, the corridor around the MPR remains at +50 and –450 basis points.

The Cash Reserve Ratio (CRR) remains 45 per cent for deposit money banks, it kept 16 per cent for merchant banks and also left 75 per cent for non-TSA public sector deposits.

Inflation continues to fall

The rate cut comes as inflation continues to slow.

Data released by the NBS shows that headline inflation fell slightly to 15.10 per cent in January 2026, from 15.15 per cent in December 2025.

The Consumer Price Index dropped to 127.4 in January from 131.2 in December, a fall of 3.8 points.

Mr Cardoso said the committee based its decision on signs that inflation is on a downward path.

He said the fall in inflation was supported by the impact of earlier interest rate hikes, better stability in the foreign exchange market; stronger capital inflows; higher export earnings and remittances; improved food supply and relative stability in fuel prices.

The MPC also noted improvements in Nigeria’s balance of payments, adding that the developments helped to strengthen investor confidence.

The committee welcomed the new Presidential Executive Order 09, which directs oil and gas revenues into federation accounts.

According to the MPC, this can improve government revenue and build external reserves.