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The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.5 per cent from 27 per cent.

The decision was taken at the 304th meeting of the Monetary Policy Committee (MPC) held in Abuja on Tuesday.

The outcome was announced by the CBN Governor, Mr. Olayemi Cardoso, with 11 members in attendance.

The MPR serves as the benchmark interest rate and is a key monetary policy tool used by the apex bank to control inflation, manage liquidity, and maintain macroeconomic stability.

The MPC said the decision to cut the benchmark rate was driven by sustained improvements in key macroeconomic indicators, particularly inflation.

Headline inflation declined for the eleventh consecutive month to 15.1 per cent in January 2026, reflecting continued price moderation.

The committee noted that although inflationary pressures are easing, maintaining other policy parameters reflects a cautious stance aimed at safeguarding financial system stability.

This rate cut represents the lowest benchmark rate since May 2024, when the interest rate stood at 26.25 per cent.

Market analysts had expressed mixed expectations ahead of the MPC meeting, with opinions divided between a rate cut and a hold decision. Some analysts argued that improving macroeconomic conditions created room for easing, while others urged caution.

The differing views reflected uncertainty over the pace at which the CBN would begin loosening its previously tight monetary stance.

At its 303rd meeting, MPC retained the Monetary Policy Rate (MPR) at 27per cent.

The latest decision marks the first rate cut after a prolonged period of aggressive tightening aimed at curbing inflation and stabilising the naira.

However, the retention of other key policy parameters suggests that the CBN is adopting a gradual approach to monetary easing.

With inflation trending downward and liquidity conditions relatively stable, the committee’s decision indicates a measured shift toward monetary easing while preserving policy safeguards to sustain macroeconomic stability.