CBN HOLDS RATES STEADY AT 26.5%

Added: 2026-05-21

[00:00:16]Monetary Policy Committee, MPC of the Central Bank of Nigeria, CBN held its 35th meeting on May 19th and 20, 2026.

[00:00:37]The committee reviewed recent developments in the global and domestic economies and assessed the near to medium-term outlook.

[00:00:56]11 members of the committee were in attendance.

[00:01:03]Decisions of the MPC.

[00:01:08]The committee's decisions are as follows.

[00:01:13]One, retain the monetary policy rate at 26.5%.

[00:01:25]Two, retain the standing facilities corridor around the MPR at + 50 to -450 basis points.

[00:01:43]Three, retain the cash reserve requirement CRR for deposit money banks at 45% merchant banks at 16% and for nontsa public sector deposits at 75%.

[00:02:11]The decisions of the MPC were anchored on a comprehensive assessment of risk to the outlook.

[00:02:27]Although inflation has risen marginally for two consecutive months, largely induced by external shocks.

[00:02:41]The NPC recognize its transitory nature and remain confident that the current macroeconomic environment is sufficiently robust to support a return to disinflation.

[00:03:07]considerations enriching its decisions.

[00:03:13]The MPC particularly noted the spillovers from the Middle East crisis which have exerted upward pressure on energy prices, costs of transportation and other logistics.

[00:03:34]However, available evidence indicates that the impact of the crisis on the Nigerian economy has been largely muted due to the benefits of prior policy reforms.

[00:03:55]These include exchange rate stability, improvements in external reserve buffers, strengthened monetary policy transmission, well capitalized banking system and ongoing fiscal consolidation which have significantly bolstered the economy's ability to absorb external shocks.

[00:04:30]As a result, the pass through of global commodity and energy price shocks to domestic inflation has been significantly mitigated and would have been more pronounced in the absence of these reforms.

[00:04:55]The MPC was therefore convinced that the essential conditions for price stability remain firmly in place.

[00:05:11]In addition, the committee welcomed the recent sovereign rating upgrade amid prevailing external headwinds.

[00:05:24]This further underscores the strength of the country's macroeconomic fundamentals and reinforces confidence in its reform trajectory and policy credibility.

[00:05:46]Members were therefore of the view that a cautious and vigilant policy stance is necessary to anchor inflation expectations and safeguard macroeconomic stability.

[00:06:10]The MPC also noted with satisfaction the successful conclusion of the banking recapitalization exercise which culminated in the emergence of 33 banks with stronger financial soundness indicators enhancing their capacity to support the economy.

[00:06:41]It urged the bank to remain proactive and adopt necessary measures to potential post recapitalization risks towards preserving financial system stability.

[00:07:05]price and other domestic developments.

[00:07:12]Headline inflation year on year rose marginally for the second consecutive month to 15.69% 69% in April 2026 from 15.38% in the pre preceding month largely driven by an increase in the food component.

[00:07:44]Food inflation rose to 16.06% 06% in April 2026 from 14.31% in March reflecting the high cost of transportation and other logistics as well as seasonal factors.

[00:08:12]Core inflation however moderated to 15.8 86% in April 2026 from 16.21% in March.

[00:08:30]Similarly, the 12 month average inflation slowed to 19.16% in April 2026 from 20.05% 05% in March, marking the sixth month of consecutive decline.

[00:08:58]Month on month, headline inflation also eased to 2.13% in April 2026, compared with 4.18% in March 2026, reflecting moderation in both food and core components.

[00:09:28]Real GDP grew by 4.0% in the fourth quarter of 2025 compared with 3.98% in the preceding quarter supported by expansion in industry and agriculture sectors.

[00:09:53]The non oil sector grew by 3.99% year on year in fourth quarter 2025 from 3.91% in the preceding quarter driven by key activities in the services sector including information and communication and transportation and storage activities.

[00:10:22]ities.

[00:10:28]Growth in the oil sector also increased to 6.79% in the fourth quarter of 2025 from 5.84% in the previous quarter on the back of improved refining in the downstream sector.

[00:10:54]Gross external reserved remained robust at 49.49 49 billion as of 15th of May 2026 compared with 48.35 billion at end of March 2026 sufficient to cover 9.04 months of imports goods and services.

[00:11:28]This strong buffer continues to reinforce investor confidence in the Nigerian economy and support exchange rate stability.

[00:11:49]Global developments.

[00:11:53]Global growth is expected to moderate in 2026 compared with 2025, reflecting the impact of heightened geopolitical tensions, energy market disruptions, and tighter financial conditions.

[00:12:23]Global inflation is anticipated to edge higher in the near term driven by elevated energy and agricultural commodity prices as well as supply chain disruptions.

[00:12:45]In some advanced economies, persistent core inflation is moderating the pace of disinflation.

[00:12:59]Similarly, exchange rate pressures in several emerging market economies are expected to sustain elevated price levels in the near to medium term.

[00:13:19]Consequently, most central banks have embarked on a cautious datadriven approach, broadly pausing or slowing monetary easing to address inflationary pressures.

[00:13:40]Outlook outlook growth is expected to remain resilient in 2026 despite emerging downside risks associated with the Middle East conflict.

[00:14:00]Available projections indicate a moderate increase in inflation in the near term.

[00:14:10]However, the combined effects of previous policy tightening, exchange rate stability, and enhanced food supply are expected to support the return to disinflation.

[00:14:34]In the light of evolving domestic and global uncertainties, the committee reaffirmed its commitment to a forwardlooking and evidencebased policy framework anchored on his primary mandate of achieving price stability while preserving the soundness and resilience of the financial system.

[00:15:11]The next meeting of the committee is scheduled for Monday 20th and Tuesday 21st July 2026.

[00:15:26]Thank you.

[00:15:27]>> Thank you Mr. Governor. That was committee number 162.

[00:15:33]presented by the chairman of the MPC and the governor of the central bank of Nigeria Mr. Kad will take questions from members of the press. Please state your name, your medium and then ask your question.

[00:15:49]You're entitled to just thank you.

[00:15:56]>> Good afternoon everyone. Good afternoon.

[00:15:59]My name is My question is uh with inflation uh rising to 15.69% in I mean global oil price pressures linked to the uh uh crisis uh in the Middle East obviously the straight up uh tensions. What steps is I mean steps is the CBN taking to uh contain important inflation and stabilize prices.

[00:16:32]>> Thank you very much. Um well let let me just say that so far I I think it's important to first of all remember where we are coming from and um these are some of the things I tried that was highlighted in the community and basically we've got to remember that we've been coming from um 11 straight months of disinflation.

[00:17:10]And we believe that what we have now um is something that has resulted from um external shocks.

[00:17:23]Um but that notwithstanding we have been able to create buffers that have protected us during this period.

[00:17:38]Um we and of course the standard and pause um upgrade is further testimony of the fact that we are clearly adopting policies that are taking us in the right direction.

[00:18:00]So the answer to that clearly is that we will continue in that path. we will sustain the course.

[00:18:11]We've seen that as a result of adopting the right policies, we have consistently being on a path of disinflation.

[00:18:24]This we believe is temporary and in due course we should go back to the period that we had embarked upon largely due to the tools that we had adopted. So we will continue in that light. In addition to that, of course, it is key that the central piece of our toolkit being ensuring that our foreign exchange rate remains stable, that it remains stable and that is something that we are committed to ensuring happens.

[00:19:13]And of course key to everything we do is to ensure there's continued and enhanced collaboration with the fiscal side because one cannot do it on their own.

[00:19:28]So that definitely is another area where we will um ensure that collaboration is strengthened and um potential pass through is minimized.

[00:19:47]Thank you.

[00:19:55]>> Good afternoon Mr. Good afternoon members of the management team. Sarah has a channel TV. Um you just had had an addition to the family in the person of um Mr. Li who has been contributing to MPC deliberations.

[00:20:15]Um he has just assumed office as a deputy governor. just to know um how that transition will strengthen the bank's capacity to navigate um today's monetary and financial sector challenges. Thank you.

[00:20:30]>> Thank you very much. Um you're right. Um Mr. Yuga has joined us recently and u for those of you who have been covering the MPC activities over the recent past, he is no new face to anybody because he has been with us on the MPC for the past years since this administration started. So you are all very familiar with him and I can confirm that you know the deliberations and his contributions to previous MPC meetings have been extremely thoughtful and very deep. In addition to that of course he brings with him um over 32 years of experience working with the central bank of Nigeria. So though I say that those of you in this room over the past um two and a half years know a very familiar face, I think those who are outside have known an even more familiar face for the past 32 years. So that's the combination of those two is really quite strong. In addition to which for those of you who may not know at one point in time when he did leave the bank he was a he was the director general of SE and um we are pleased to have him here because we believe that the combination of those experiences especially at a time like this when Nigeria is um transiting to a a firmer and more robust um financial ecosystem.

[00:22:25]Mind you, where sitting from the perspective of SE also does give a perspective of the whole financial system. So that's also very important to mention. So he brings um experience that he's gotten from a different lens but looking at the same um business and industry that we look at. So the combination of all those I believe is adding great value to the central bank of Nigeria.

[00:23:03]>> Good afternoon Mr. Governor, members of the MPC, I am not administrator. Mr. Governor, successful completion of the recent recapitalization program which was also commended by the IMF appears to have ended speculations about fun failings and is expected to strengthen resilience, lending capacity and risk management. Mr. Governor, I would like to know the status of the fans yet to meet the threshold. Thank you very much.

[00:23:31]>> Thank you. Thank you for that question.

[00:23:34]Um and this was a question that also came up at the um annual meetings in Washington DC. Uh and really my response then which is not different from today is to say that we need to also um take credit for the distance that we have traveled in getting to where we are. And if you notice much of what has come out of the banking recapization exercise which saw the emergence of 33 banks meeting that requirement is one that shows the resilience of Nigeria investors. the belief that investors have in our economy and given the fact that the ratio of investors from um outside to inside was I think domestically was about 74% to 26% or thereabouts.

[00:24:52]So that also shows a great interest in investing in Nigeria and I think that is something that is that Nigerians should be very proud of. They should be very very proud of it. And of course what you've seen is that the recapitalization exercise has gone on relatively seamlessly.

[00:25:16]Relatively seamlessly.

[00:25:19]The banks you talk about are banks that have been subjected to various form of legal uh regulatory and judicial issues and they are ones that with the fullness of time will be in a position to move forward on that recapitalization trajectory.

[00:25:49]Bear in mind also that um there was at a particular point in time uh when the central bank had calls to intervene um some of the time that they would have had similar to what the other banks had was taken away from them. So it'll be unfair to compare them in terms of timing to what the other banks have been able to do within that limited time that we gave them. However, we are fully um on top of all of the banks that are still on that uh road of travel. And we and there's business continuing as usual and we support all the efforts that they are making towards um getting over the regulatory and um legal impediments in their way.

[00:26:54]>> Good afternoon, Mr. President. My question is that the CBN has kept a high benchmark interest rate to stabilize the NRA and regulation expectations.

[00:27:07]However, this has constrained credit growth for the small and medium enterprises. What is the CBN doing to post credit and boost the SN sector in Nigeria?

[00:27:20]>> Thank you very much.

[00:27:20]>> My name is Elizabeth Christopher, Voice of Nigeria.

[00:27:24]>> Voice of Nigeria. Okay. Thank you. Voice of Nigeria. We've heard your voice. So, um we the interpretation of that voice is that you want to see more on the theme.

[00:27:43]>> Yes. And and that is a very it's a fair um ask. It's a fair ask. Now let let me first and foremost say that the um effort to direct more credit in the MME sector is not one that is the exclusive preserve of the central bank. It isn't it's not an exclusive preserve of the central bank.

[00:28:13]It is something that is done in collaboration with different arms of government and that's why you have the ministry of industry, trade and investment, you have BOI and you have um the fiscal interventions from time to time in certain sectors that they believe are necessary to ensure that those who need to be given the impetus and in some cases really protection are done. So in the case of central bank as increasingly is we see ourselves as a catalyst and we um use our convening power and we use some of the tools at our disposal to ensure that we make it more palatable for those who previously may have shied away from dealing withmemes to want to be encouraged to do so. So, so that's where we come from.

[00:29:29]And I'm very pleased to say that from what we've seen of recent, from the numbers we've been looking at at recent, we see that new credits and I emphasize new credits that the volume of new credits are going to the to the theme sector have increased. they have increased and now they can be attributed to various things. It can be attributed to various things not least of which is the fact that many of the commercial banks now perhaps and I cannot speak for them but perhaps they are recalibrating and looking at the future and seeing how to diversify their um lending base. There's that and there are some who may be feeling that um there's a a a a a cause to pause with respect to some of the large tickets and look at the SMMES and seeing how they can um expand their business in in a sector that is so important and so very critical to the development of our country. I noticed that in April 2026 um the amount of new credits went up by about 199 roughly. It's not exact 199 million from 153 million in March. And this was particularly seen at the retail end of the market by a number of facilities.

[00:31:27]Also, lending remained heavily skewed towards the general category which counted for about 94.73% of new credit facilities. New while general commerce accounted for about 2.4 2.46%.

[00:31:47]again reinforces the dominance of retailme and short-term facilities.

[00:31:53]So it's clear that banks are now willing to diversify their credit exposure at this time and I'm not saying that this will continue from the central bank's perspective. However, um there are a number of things that have happened. We've I don't know if you saw, but recently we signed anou with NCC.

[00:32:20]We signed anou with NCC.

[00:32:24]Thatou with NCC was largely driven to make it easier and ensure that the potential bottlenecks that themes had in particular everybody but in particular themes with respect to fraud and inability to um connect properly into various systems are becoming things that between NCC and ourselves we can jointly manage together. Then of course the global standing um instruction gsi is another initiative that the central bank of Nigeria has brought up okay with it's it's a toolkit which is intended to help to ensure that um creditor institutions are able to offset against um balances wherever they exist. exist of um recalcitrant dattors. So those are all issues that the central bank of Nigeria is trying very hard to act a part that will ensure that the ecosystem is a lot more enabling for those who are not um willing to invest in that sector to do so. Of course the DFIs is another very critical sector and the development financial institutions.

[00:34:11]We have recently um upgraded and allowed the single oblig limits to go up. Okay. And the reason for that is that for a long time many of them were hugely constrained in the amount of credits that they can extend to to tomemes and we're of course encouraging foreign DFIs in particular and seeing what tools we can um extend to ensure that they too play a part that is increasingly more impactful. This is all work in progress. We we're not there yet, but all I can say is that the willingness to ensure that more credit is directed at the theme sector is certainly increasing in leaps and bounds. Thank you.

[00:35:13]>> Good afternoon, Mr. Governor. My name is from to be precise last week you see the launch edition of a forest manual to deepen transparency in that sector given the improvement we've seen so far and there's still speculative trading in that axis what CBE is doing to make sure that ensures >> thank you very much sorry when I was talking about Smances I it was 199 billion not million.

[00:35:49]>> Yeah. So please correct that.

[00:35:52]>> Okay. Now um on the issue of of um the new FX manual, the new FX manual is a continuation of what has already taken place with respect to the FX code and um the the E platform that we are using which has resulted quite frankly in a lot of transparency.

[00:36:23]and has brought a lot of stability to the market because if you think back of what the situation was before we started and what it is now, it has moved in leaps and bounds and it will continue to do so. And that is why we thought it was important to bring out um the FX manual at this time. Mind you, it was um 2017 I believe was the last time that any revision was made to this manual. So it is more than more or less timely that we do such a revision now. It's more or less timely because so many things have changed that everybody needs to be aware of. A number of things I will highlight and you're very very free to it's going to be effective June 1st. It will be on our website and you will get it for free. Those of you that want to have a physical copy, you'll get it for free.

[00:37:33]We feel that it is important that all stakeholders should have a copy so they don't need to feel as if information is hidden from them. It should be something that is open and available to everybody.

[00:37:50]It will bring about consistency, transparency and a couple of things important to highlight there because there are number of differences that have come up relative to the past. Again, I invite you to go and read them. But it's going to make it easier for those who in the past used to export and were reluctant or diverted their funds elsewhere is going to make it a lot easier and more encouraging for them to bring their FX back into the system um because you'll have unfettered relatively easy access to money. So, and that's in line with the way the foreign exchange market has been developing.

[00:38:43]We're trying and it's again ongoing work in progress. As we see developments taking place where there's need for us to tweak and to take away certain things and make it easier for many, we will do so. the same way that you are now able to um transact as you are all finding um your foreign exchange activities without having to frontload. You travel, you can use your Naira card, it works. It's the same spirit in which we expect the foreign exchange market to continue to develop.

[00:39:22]>> Thank you, Mr. Governor. I have two questions that came in today. questions me.

[00:39:32]Thank you.

[00:39:34]I have a question from the sun papers.

[00:39:39]He said, "Mr. Governor, sir, Nigerian bank customers are concerned about the instant bank charges such as the 50 naira stamp duty which they receive daily as alerts. How is the CBN protecting bank customers from what appears to be unfair charges for transactions not carried out by them?

[00:40:04]>> Thank you.

[00:40:07]>> Thank you very much. Again, let let me at the outset say that this is obviously an area that is very dear to my heart.

[00:40:17]And the reason is because I recall that um two over two years ago, two and a half years ago when I was at the Senate and I was being screened to become the governor of the central bank. This is one of the questions that seemed to come out not not just from one place but a multiple number of um members of the Senate at that time. So I it's something that I've been taking very very close watch on and I will say a number of things. Number one, the stamp duty is not the um outcome of the banking system by any stretch of the imagination. It isn't. So for those of you that think it is, it is not. This is something that emanates from the tax authorities. And all that is happening now is that the banks are used as um I don't want to call it agents but it is their responsibility to ensure that the money gets to the final destination. So that is not it's definitely not coming from the banks. Then secondly on the issue of how the avoiding a situation where um consumers feel that they are made to pay um for charges that do not they believe they don't have any business paying for. Now, now that is a perception and I'm not here to to talk on behalf of any commercial bank because really and truly where you have a problem your first line is to go to the bank and they have a process by which if you are not satisfied you escalate and then if that doesn't work you escalate. We have a consumer protection um department here that is also um looking at issues that concern people who believe that they have been hard done by as a result of the system.

[00:42:35]Now it is important to mention to you that because of the concerns we have had a committee has been set up which um involves and it is led by our consu uh consumer um department and they meet quarterly um with what they term consumer Consumer experience executives which involves representatives from the various deposit money banks and the top 10 micro finance banks. They meet quarterly with the objective of looking at these issues and seeing how they can improve and address issues that still hang.

[00:43:34]Now one issue that seems to come up in my view and again this is work in progress is the fact that banks as a rule send multiplicity of um advis alerts alerts to their customers.

[00:43:57]multiplicity.

[00:44:00]And perhaps there's a way that some of these things can be consolidated so that the customer can immediately tell what debit is for what rather than a whole slew of different um advis going out which create confusion for customers. So I think these are some of the issues that are being looked at and hopefully um they will in the fullness of time be able to come up with solutions again work progress.

[00:44:42]Um then the other thing worth mentioning is the whole issue of market conduct.

[00:44:51]market conduct.

[00:44:53]As you know, we have set up a compliance department and compliance also has a particular unit which looks at market conduct and obviously conduct risk. And what do we mean by that? We want to ensure that continuously we are making reviews of the framework that the different deposit money banks use in managing um the a situation where activities happen, customers complain and do they do the right thing or do they have the capacity to ensure that they are able to manage the requests from start to end and they have the wherewithal to to um compensate customers as and when due. So that whole framework of um of um compliance and and customer experience is is also being looked at from a different angle. So there are two angles that the central bank has put at its disposal to ensure that we continue to manage what is obviously an ongoing process and minimize it considerably.

[00:46:31]Thank you sir.

[00:46:33]I have a question from this daily and she said Mr. Governor sir you have referenced the stability of fraud exchange market as a key element in the fight against inflation and renewed investor confidence in the economy.

[00:46:53]We've also noticed a decline in the reserves in recent weeks and it is rumored that the CBN has been intervening in the market adversely to ensure stability of the NA. Is this true?

[00:47:06]>> Thank you.

[00:47:06]>> Thank you. The answer is that it's not true.

[00:47:11]Um, and again, I think a lot of this rests in legacy, and I I will not um stop saying it until people realize that the foreign exchange system has changed considerably.

[00:47:31]It has changed considerably.

[00:47:34]Um you know when we when we came when we the this administration took over you roughly had um foreign exchange turnover on a daily basis of about a 100 million US um as at today it's roughly about 550 million US roughly And at times it has spiked as high as $1 billion on a daily basis. Not every day, but it has spiked. Now the goal is for it to get to that $1 billion every day. And it will get there. It definitely will get there.

[00:48:21]with some of the reforms that have been taken with some of the things that you will see in the FX manual we are confident that as time goes along we will get to that level.

[00:48:35]Now where you have already a deepening foreign exchange market where liquidity rules the day you there's very little need for you to intervene.

[00:48:50]The market operates all on its own. So there's little need to intervene. In actual fact, um, relative to turnover in 2025, relative to the turnover in 2025, the CBN intervened in about 1.2 1.3%. It was so small relative to turnover. It was so small. So we've gotten to that stage where the market itself due to the reforms that has been taking place has been able to find its own level through willing buyer, willing seller.

[00:49:34]Um proper behavior with respect to market conduct.

[00:49:40]um transparency with everybody feeling that there's more or less um symmetry in terms of um of um access to information. Nothing is being hidden. That is what makes a market.

[00:49:58]That is what makes a market and that is what makes a market function. And as we go along the way as I'm need to other instruments or tweak policy to make it even more functional we will do so we will have we will not hesitate to do so.

[00:50:20]So to answer your question, no.

[00:50:25]What we have done and which is normal is that in the course of daily activities, there may be need to meet uh um of the requirements of various arms of government or uh loans outstanding obligations due. They have to be paid and so they are paid but believe me as they are paid so does new money come in actual fact today I don't want people to lose um looking at our reserves every I mean you're free to do so if you want to I won't stop you from doing it but you'll see that it is so dynamic that we are literally back in numbers to where we are prior to the to the Iran war. We are literally back there again.

[00:51:31]So, and I believe that it will continue um to be improving in that particular direction.

[00:51:41]So on on the issue of reserves that really and truly is what it is today.

[00:51:49]>> Thank you.

[00:51:51]This brings us to the end of this pres.

[00:51:54]Thank you all for coming and see you in July.

[00:51:59]>> I don't you know why? Because we misinterpreted misinterpret.

[00:52:07]I have told me that >> it's not >> good. Thank you.

[00:52:34]Okay.

[00:52:41]>> Okay.