The Central Bank of Nigeria (CBN) has reduced Nigeria’s benchmark interest rate to 26.5%, signaling a shift in monetary policy amid easing inflationary pressures.

The decision was announced by CBN Governor Olayemi Cardoso at the conclusion of the Monetary Policy Committee’s (MPC) 304th meeting held in Abuja on Tuesday.

According to Cardoso, the committee approved a 50 basis point cut in the Monetary Policy Rate (MPR), bringing it down from 27% to 26.5%.

Second Consecutive Rate Cut Under Current Leadership

This marks the second time the MPC has reduced interest rates under the current administration of the apex bank.

A similar 50-basis-point reduction was implemented in September 2025, followed by a pause in November 2025.

The latest move reflects growing confidence that inflationary pressures are gradually moderating. Nigeria’s headline inflation dropped to 15.10% in January 2026, providing room for monetary easing.

What the Interest Rate Cut Means for Nigeria

The reduction in the benchmark interest rate is expected to:

Lower borrowing costs for businesses and consumers

Encourage investment and private sector growth

Stimulate economic activity

Improve credit access across key sectors

For businesses, especially small and medium-scale enterprises, cheaper credit could translate into expansion opportunities and improved cash flow.

For consumers, it may result in slightly lower lending rates on loans and mortgages, depending on banks’ response.

Balancing Growth and Price Stability

The CBN’s decision highlights its ongoing effort to strike a balance between controlling inflation and supporting economic growth.

While inflation remains above long-term targets, the downward trend has created policy space for cautious easing.

Economic analysts will be closely monitoring how financial markets and commercial banks respond in the coming weeks.

Further details from the MPC communiqué are expected to provide additional insight into the committee’s outlook for Nigeria’s economy in 2026.