CBN holds interest rate at 26.5%, pausing its 2026 easing cycle as inflation ticks up

Nigeria's Monetary Policy Committee kept the benchmark rate (MPR) at 26.5% at its 19-20 May 2026 meeting - its first pause after February's cut - as headline inflation edged up to 15.69% in April.

By Opaindex Markets Desk · 24 June 2026 · Nigeria · 3 min read

Key takeaways

▪The CBN's Monetary Policy Committee held the Monetary Policy Rate (MPR) at 26.5% at its 305th meeting on 19-20 May 2026, pausing the easing cycle it began in February 2026.
▪The committee - 11 members in attendance, chaired by Governor Olayemi Cardoso - left the Cash Reserve Ratio at 45% for commercial banks and 16% for merchant banks, with the asymmetric corridor at +50/-450 basis points around the MPR.
▪The hold followed back-to-back inflation increases: headline CPI rose to 15.69% in April from 15.38% in March (and later to 15.93% in May), though the MPC judged the uptick largely transitory and externally driven.
▪A 26.5% benchmark keeps credit expensive for construction, manufacturing and food distribution - feeding into the cement, diesel and food prices Opaindex tracks.

Nigeria's central bank left interest rates unchanged in May 2026. At the 305th meeting of the Monetary Policy Committee (MPC) on 19-20 May 2026, the Central Bank of Nigeria (CBN) retained the Monetary Policy Rate (MPR) at 26.5% - the benchmark that anchors borrowing costs across the economy.

The committee, with 11 members in attendance and chaired by CBN Governor Olayemi Cardoso, also held its other tools steady: the Cash Reserve Ratio stayed at 45% for commercial banks and 16% for merchant banks, the requirement on non-TSA public-sector deposits at 75%, and the asymmetric corridor around the MPR at +50/-450 basis points.

A pause, not a pivot

The hold marks the first pause in the easing cycle the CBN started in February. At the 304th meeting on 23-24 February 2026, the committee delivered its first cut of the tightening era - -50 basis points, from 27.0% to 26.5% - citing disinflation and a steadier naira. Holding in May signals the bank wants more evidence that price pressures are firmly receding before it cuts again.

Why the MPC held

The committee pointed to back-to-back increases in inflation in March and April as reason for caution. Headline inflation rose to 15.69% in April 2026, up from 15.38% in March. The MPC characterised the uptick as largely transitory and driven by external shocks, and expressed confidence that the economy could return to disinflation - but chose to keep policy tight rather than risk a premature cut.

What it means for prices and credit

A 26.5% policy rate keeps the cost of money high. Commercial lending rates sit well above the MPR, so businesses that rely on credit - builders, manufacturers and food distributors - continue to pay a premium to finance stock and operations. Those financing costs feed into the prices households ultimately pay, which is why a rate decision sits upstream of the cement, rice and energy figures Opaindex tracks daily.

The inflation and naira backdrop

The MPC acted on April's 15.69% print; May inflation later came in at 15.93% (NBS, released 15 June 2026), confirming the gentle upward drift the committee flagged. A key condition for faster disinflation is a stable currency: the naira has held near ₦1,370/$ at the official window, and continued FX stability is part of what would let the CBN resume cutting at a future meeting. Opaindex tracks the naira alongside the commodity prices that monetary policy ultimately shapes.