CBN Holds Interest Rate at 26.5% as Businesses Back Cautious Approach

The Central Bank of Nigeria (CBN) has retained its benchmark interest rate, the Monetary Policy Rate (MPR), at 26.5 percent for the second consecutive meeting, citing inflation concerns and growing geopolitical tensions in the Middle East.

CBN Governor Olayemi Cardoso announced the decision after the Monetary Policy Committee’s 306th meeting in Abuja.

He said that although Nigeria’s inflation rate eased slightly to 15.91 percent in June, global uncertainties could still put pressure on prices, making it necessary to maintain a cautious monetary policy stance.

According to Cardoso, Nigeria’s economy has remained resilient despite external shocks, supported by reforms introduced by both fiscal and monetary authorities.

He added that keeping rates unchanged would allow the CBN to monitor economic developments and inflation trends before taking further action.
Business leaders and economists largely supported the decision, describing it as the most practical option amid global uncertainty.

However, they noted that high borrowing costs continue to challenge manufacturers and small businesses.

Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, said the Middle East crisis could lead to higher energy costs and inflation, making an immediate rate cut unlikely.

He called for increased government support through development finance institutions to provide affordable funding for businesses.

The Manufacturers Association of Nigeria, however, maintained that interest rates should be reduced once inflation shows a sustained decline.

The group argued that lower borrowing costs would encourage investment, boost production, and improve competitiveness in the manufacturing sector.

Cardoso said inflation is expected to ease further in the coming months due to exchange rate stability, improved food supply, and the delayed effects of earlier monetary tightening measures.

He also revealed that Nigeria’s external reserves rose to $52.52 billion as of July 17, 2026, while the economy expanded by 3.89 percent in the first quarter of the year.

While expressing optimism about continued economic growth, the CBN governor warned that an escalation of the Middle East conflict remains a major risk to Nigeria’s economic outlook.

The MPC is scheduled to meet again on September 21 and 22, 2026.

Join us on our WhatsApp Platform @KOIKIMEDIA NEWS YOUR PAGE

koikimedia Bringing the World 🌎 Closer to Your Doorstep