CBN retains interest rate at 26.5 percent

The Central Bank of Nigeria has retained the country’s benchmark interest rate, known as the Monetary Policy Rate, at 26.5 percent.

CBN Governor Olayemi Cardoso announced the decision on Wednesday at the end of the Monetary Policy Committee’s 305th meeting in Abuja. He said all 11 members of the committee agreed to maintain the current rate alongside other monetary policy parameters.

The committee also retained the cash reserve ratio for deposit money banks at 45 percent and merchant banks at 16 percent. Cardoso said inflationary pressures were largely driven by external shocks, including the impact of the Middle East crisis on global energy and transportation costs.

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He said the committee believes the recent rise in inflation is temporary and noted that ongoing reforms, including exchange rate stability and fiscal consolidation, have helped reduce the impact of global price pressures on Nigeria’s economy.