Cardoso defends rate hold, says M/East conflict poses global

Omeiza Bilal

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained all key monetary policy parameters, opting to sustain its tight policy stance as it seeks to consolidate gains in inflation moderation, preserve exchange rate stability and shield the economy from growing global uncertainties.

At the end of its 306th meeting held on July 20 and 21, 2026, the committee left the Monetary Policy Rate (MPR) unchanged at 26.5 per cent, while also retaining the asymmetric corridor around the MPR at +500/-100 basis points, the Cash Reserve Ratio (CRR) at 40.5 per cent for Deposit Money Banks and 16 per cent for Merchant Banks, and the Liquidity Ratio at 30 per cent.

Addressing journalists after the meeting, CBN Governor and Chairman of the MPC, Olayemi Cardoso, said the committee unanimously agreed to maintain the current policy stance after a comprehensive assessment of domestic and global economic conditions.

According to him, although Nigeria recorded a modest decline in headline inflation in June, external risks remain elevated, making policy continuity the most prudent option.

“The committee’s decision to maintain the current policy stance followed a thorough assessment of the balance of risks. Although headline inflation moderated marginally in June 2026, global uncertainties have heightened due mainly to the renewed hostilities in the Middle East. In view of the evolving developments, maintaining a cautious monetary policy stance remains appropriate,” Cardoso said.

The governor noted that despite growing geopolitical tensions and global economic uncertainty, Nigeria’s economy has continued to demonstrate resilience due to reforms implemented by both fiscal and monetary authorities.

He said available economic indicators suggest that recent policy reforms have strengthened the country’s ability to absorb external shocks.

“Available evidence suggests that the Nigerian economy has remained largely resilient to the external shocks, reflecting the gains from prior reforms implemented by the fiscal and monetary authorities,” he added.

Cardoso also highlighted improved collaboration between the Federal Government and the Central Bank, describing stronger policy coordination as essential for achieving macroeconomic stability.

According to him, members of the committee agreed that greater alignment between fiscal and monetary policies would improve policy effectiveness and support broader economic objectives.

The MPC’s decision follows the latest inflation report showing that Nigeria’s headline inflation fell to 15.91 per cent in June 2026, marking the first decline in three months.