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Central Bank Cuts Interest Rate to 26.5% as Inflation Eases

February 24, 2026
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Why CBN Retained Bencmark Interest Rate At 27.5%

The Central Bank of Nigeria has reduced its key interest rate to 26.5%, signalling growing confidence that inflation is beginning to slow.

The decision, announced in Abuja by Governor Olayemi Cardoso, marks the first rate cut since November 2025.

The Monetary Policy Committee lowered the rate by 0.5 percentage points from 27%, citing improved exchange rate stability, easing food prices and the delayed effects of earlier monetary tightening.

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For businesses and borrowers, the move could bring some relief after months of high borrowing costs, although lending rates are likely to remain elevated in the near term.

Cardoso said inflation was on a downward path, supported by better food supply, more stable fuel prices and stronger capital inflows.

Recent figures from the National Bureau of Statistics show inflation edged down to 15.10% in January from 15.15% the previous month.

The central bank also adjusted its policy corridor to encourage banks to lend more rather than hold excess funds, while keeping other key ratios unchanged.

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The rate cut follows a similar move in September 2025 and may signal a gradual shift away from aggressive tightening, though analysts say the bank is likely to remain cautious until price stability is firmly established.

Meanwhile, the naira has strengthened in recent weeks, helped by reforms in the foreign exchange market, including allowing bureau de change operators access to official trading windows.

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Prosper Okoye is a Correspondent and Research Writer at Prime Business Africa, a Nigerian journalist with experience in development reporting, public affairs, and policy-focused storytelling across Africa

Prosper Okoye

Prosper Okoye is a Correspondent and Research Writer at Prime Business Africa, a Nigerian journalist with experience in development reporting, public affairs, and policy-focused storytelling across Africa

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