CBN reduces interest rate to 26.5%.

…As External Reserves hit $50.4 b

…20 banks cross recapitalization threshold, mobilise N4.05 trn

Emma Ujah,  Abuja Bureau Chief

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

The Governor of the CBN, Mr. Olayemi Cardoso, disclosed this at the end of the 304th  meeting of the Monetary Policy Committee (MPC) in Abuja.

According to him, the bank also retained the standing facilities corridor at +50 to -450 basis points and kept the Cash Reserve Requirements, CRR   unchanged (deposit money banks 45%, merchant banks 16%, and 75% for non  TSA public sector deposits).

Cardoso explained, “The committee’s decision was premised on a balanced evaluation of risk to the outlook, which suggests that the ongoing disinflation trajectory would continue, largely supported by the transmission of previous monetary tightening, sustained exchange rate stability and enhanced food supply.”  

He added that the committee took into account the sustained deceleration of the   year-on-year, headline inflation in January 2026 marking the 11th consecutive month of decline.

“This downward trajectory in inflation was driven mainly by the continued effects of the contractionary monetary policy, stability in the foreign exchange market, robust capital inflows and improvement in the balance of payments,” he said According to him, the momentum was further reinforced by relative stability in the prices of petroleum products and improved food supply conditions, especially staples.

His words, “These outcomes have indicated that prior tightening has continued to anchor expectations.

“The MPC particularly noted the remarkable performance of Nigeria’s external sector, evidenced by the robust accretion   to foreign exchange reserves, supported by higher export earnings and increased remittance inflows and this has contributed to greater stability in the foreign exchange market and bolstered investor confidence.”

The CBN boss welcomed the newly issued Presidential Executive Order 09 redirecting oil and gas revenues into the Federation account, which he observed has potential impact of improving fiscal revenue and accretion to reserve.

“Given these improved macroeconomic conditions, the committee believed that a moderate easing was consistent with the prevailing inflation dynamics,” he said

Cardoso acknowledged the continued resilience of the banking sector, with most of the key financial soundness indicators remaining within regulatory thresholds with regards to key financial soundness.

20 banks cross minimum recapitalization threshold

With regards to the ongoing recapitalization programme in the banking sector, the Governor disclosed that of the 33 banks that have raised additional capital, and 20 have met the new minimum capital requirement.

The recapitalization, according to him, would reinforce financial system resilience and enhance the sector’s capacity to support sustainable economic growth.

Banks mobilise N4.05 trn

Cardoso disclosed that the recapitalized banks have mobilized N4.05 trillion from both within the country and from foreign investors.

The ratio, according to him, was 71 percent from the domestic economy, while 28. 33 came from foreign investors.

The Governor expressed confidence that other banks in the industry would be able to do the needful before the end of the exercise  

He added that depositors of banks that are under regulatory intervention have nothing to fear, as the CBN was engaging relevant stakeholders to ensure the safety of such customers’ deposits and ensure the stability of the industry.

External    Reserves hit $50.4b

The CBN Governor further   disclosed that the nation’s gross external reserves stood at $50.4 billion, as of February 19, 2026, the highest level in 13 years and capable of financing imports for over nine months.      

On the outlook, the governor said that he was optimistic of a sustainable stability and continued reduction of inflation in the near term.

Warns of the election spending impact

Cardoso   noted that despite the   optimism about sustaining the gains of the reforms in the near term, there was need for caution as election spending could create disruptions.

He urged the fiscal authorities to “do everything to balance things out,” noting that maintaining sustainability required the efforts of all stakeholders.