CBN Retains Interest Rate for Nigerian Banks at 26.5% Amid Rising Inflation
- The CBN’s Monetary Policy Committee has retained the benchmark interest rate at 26.5% after its 305th meeting in Abuja
- The committee believes the recent rise in inflation is temporary and expects inflation to slow down again despite external economic shocks
- The decision followed an increase in Nigeria’s inflation rate to 15.69% in April 2026, driven mainly by higher fuel prices and global tensions
Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria has decided to maintain the country’s benchmark interest rate at 26.5%.
Speaking on Wednesday, May 20, 2026, after the committee’s 305th meeting held in Abuja, the CBN Governor, Olayemi Cardoso, confirmed that the Monetary Policy Rate (MPR) would remain unchanged.
Source: UGC
Cardoso stated:
“The decisions of the MPC were anchored on a comprehensive assessment of risk to the outlook, although inflation has risen marginally for two consecutive months, largely induced by external shocks.
“The MPC recognises its transitory nature and remains confident. confident that the current macroeconomic environment is sufficiently robust to support a return to disinflation."
CBN adjusts other important metrics
Cardoso explained that the committee also kept other key financial indicators steady. The Cash Reserve Ratio was retained at 45 per cent for commercial banks and 16% for merchant banks, while non-Treasury Single Account public sector deposits will continue to attract a 75% CRR.
In addition, the MPC left the standing lending and deposit facility corridor unchanged at +50 and -450 basis points around the MPR.
The latest decision comes after the apex bank reduced the interest rate by 50 basis points in February 2026 and maintained the same rate during the November 2025 MPC meeting.
The committee’s choice to hold rates steady follows a slight increase in the country’s inflation figures.
According to the latest Consumer Price Index report released by the National Bureau of Statistics, Nigeria’s headline inflation rose from 15.38% in March 2026 to 15.69% in April 2026, showing an increase of 0.31 percentage points.
The recent rise in the prices of goods and services in Nigeria has been linked largely to increasing fuel costs, worsened by mounting geopolitical tensions involving the United States, Israel, and Iran since February.
The conflict disrupted crude oil shipments through the Strait of Hormuz, one of the world’s key oil transport routes in the Middle East.
Source: UGC
CBN reforms moderated global price pressures
Speaking on the situation, Cardoso said the crisis has had only a limited effect on Nigeria’s economy due to the impact of earlier economic reforms introduced by the government and monetary authorities.
According to him, measures such as improved exchange rate stability, stronger external reserves, tighter monetary policy, a resilient banking sector, and ongoing fiscal reforms have helped strengthen the economy against external shocks.
He added that these policies have also reduced the extent to which global price increases affect domestic inflation.
CBN relaxes PTA, BTA rules
Meanwhile, Legit.ng earlier reported that the CBN introduced a major adjustment to its foreign exchange policy by partially relaxing its 2024 cashless rule on Personal Travel Allowance (PTA) and Business Travel Allowance (BTA), giving travellers renewed access to cash dollars.
Under the revised FX Manual, which takes effect from June 1, 2026, travellers will now be allowed to receive 25% of their PTA and BTA in cash dollars, while the remaining 75% will continue to be processed electronically through debit and credit cards.
The move signals a notable shift from the apex bank’s earlier strict cashless directive and is expected to bring relief to many Nigerians travelling abroad for personal and business purposes.
Source: Legit.ng
