Amid Renewed Hostilities in M’East, Inflation Concerns, CBN Retains MPR at 26.5%, Other Monetary Parameters at Current Levels

The Central Bank of Nigeria (CBN) has opted to hold its benchmark Monetary Policy Rate (MPR) steady at 26.5%, signaling a cautious approach amid heightened global uncertainties, particularly the renewed hostilities in the Middle East. The decision, made at the end of a two-day Monetary Policy Committee (MPC) meeting, also saw other monetary parameters, including the standing facilities corridor and Cash Reserve Ratio (CRR), remain unchanged.

CBN Governor Olayemi Cardoso explained that while headline inflation saw a marginal moderation in June, the escalating global tensions necessitate maintaining the current policy stance. He noted the potential spill-over effects of the Middle East conflict on global energy prices and its subsequent impact on domestic inflation. "In view of the evolving developments, maintaining a cautious monetary policy stance remains appropriate," Cardoso stated.

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In view of the evolving developments, maintaining a cautious monetary policy stance remains appropriate.

Despite these external headwinds, Cardoso asserted that the Nigerian economy has demonstrated considerable resilience, attributing this to the gains from previous reforms implemented by both fiscal and monetary authorities. He acknowledged that unforeseen global challenges have pushed back the CBN's target of achieving single-digit inflation to January 2027. However, he expressed confidence that the ongoing painful reforms are yielding positive outcomes and paving the way for future economic improvements.

Cardoso also highlighted the recent increase in external reserves, which reached $52.52 billion as of July 17, 2026, up from $50.47 billion in May. He affirmed that the current exchange rate supports the nation's competitiveness. The CBN governor stressed the importance of continued policy coordination between fiscal and monetary authorities, commending the government's efforts to improve crude oil production and encouraging reforms in other sectors like solid minerals to further strengthen macroeconomic fundamentals.

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The MPC acknowledged the federal government’s renewed commitment to strengthening policy coordination, with particular emphasis on the ongoing collaboration with the monetary authority which has helped to moderate the impact of the Middle East crisis on the domestic economy.