Breaking: CBN holds benchmark interest rate at 26.5% in ongoing inflation fight

In a bid to curb inflation and stabilize the naira, the Central Bank of Nigeria (CBN) has left its monetary policy rate unchanged at 26.5 percent.

Announcing the outcome of the 305th Monetary Policy Committee (MPC) meeting in Abuja on Wednesday, CBN Governor Olayemi Cardoso stated that the decision to freeze all major policy parameters was unanimous.

The hold underscores the apex bank’s cautious approach as it navigates deep-seated inflationary challenges and a volatile global economic landscape.

According to the MPC communiqué, the Monetary Policy Rate, MPR, which serves as the benchmark interest rate, was retained at 26.5 per cent.

The committee also retained the Cash Reserve Ratio, CRR, at 45 per cent for commercial banks and 16 per cent for merchant banks, while non-Treasury Single Account public sector deposits remain at 75 per cent.

Similarly, the MPC retained the asymmetric corridor around the MPR at +50 and -450 basis points.

The decision signals the apex bank’s determination to consolidate recent monetary tightening measures introduced to tame inflation and stabilise Nigeria’s financial markets.Insecurity Solutions Forum

Since assuming office, Cardoso has maintained an aggressive monetary tightening stance, repeatedly raising interest rates to curb rising inflation and restore investor confidence in the economy.

The retention of the benchmark rate is expected to influence lending rates, borrowing costs, investment decisions and overall liquidity conditions within the banking sector.

Financial analysts note that the MPC’s decision highlights the delicate balance the central bank must maintain between taming inflation and fostering private sector productivity.