By: ThinkBusiness Africa
The Central Bank of Nigeria (CBN) on Tuesday lowered its benchmark interest rate for the second time in five months, signaling a definitive shift toward monetary easing as the country’s inflation battle shows signs of a turning point.
At the conclusion of the two-day Monetary Policy Committee (MPC) meeting in Abuja, Governor Olayemi Cardoso announced a 50 basis-point reduction in the Monetary Policy Rate (MPR), moving it from 27% to 26.5%.
The decision follows a sustained decline in price pressures. According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation rate eased to 15.10% in January 2026—the tenth consecutive monthly decline and the lowest level recorded since late 2020.
The MPC’s “dovish” stance was also supported by a stabilizing Naira, which has gained roughly 6% against the US Dollar since the start of the year, bolstered by foreign exchange reserves that have surged toward the $49 billion mark.
Joining the “African Easing Circle”
Nigeria’s move aligns it with several of its continental peers who have pivoted to support economic growth now that the global inflation shock of previous years is receding.
Egypt and Angola have recently cut policy rates by 100 basis points to 19% and 17.50% respectively; Kenya also slashed its rate by 25 bp to 8.75%.
While countries like Ghana and Zambia have also pushed ahead with cuts, some regional giants remain cautious. The South African Reserve Bank (SARB) opted to hold its rate at 6.75% last month, choosing to wait for inflation expectations to anchor more firmly toward its 3% target.
The 50 bp cut, while modest, is expected to lower borrowing costs for Nigerian businesses and potentially stimulate activity in the manufacturing and agricultural sectors. However, Governor Cardoso maintained a note of caution, stating that future decisions remain strictly “data-driven.”
“While we are encouraged by the disinflationary trend, the committee remains vigilant,” Cardoso said. “Our priority is to ensure that this easing does not trigger a reversal in the hard-won stability of the Naira.”
