…As Cardoso charges banks on proactive post-recapitalisation risks
By Charles Ebi
Governor of the Central Bank of Nigeria, Olayemi Cardoso, on Wednesday announced that the Monetary Policy Committee ,MPC, has retained the Monetary Policy Rate ,MPR, at 26.5%, citing persistent inflationary pressures and uncertainties in the global economic environment.
Cardoso disclosed the decision at the end of the MPC meeting attended by all 11 members of the committee, who reviewed recent developments in both the domestic and global economies as well as the near- to medium-term outlook.
Besides retaining the benchmark interest rate at 26.5%, the committee also maintained the asymmetric corridor around the MPR at +500 and -100 basis points.
The MPC further retained the Cash Reserve Ratio ,CRR, for Deposit Money Banks at 45%, Merchant Banks at 16%, and non-Treasury Single Account public sector deposits at 75%.
According to Cardoso, the committee’s decisions were anchored on a comprehensive assessment of risks to the economic outlook, particularly rising inflationary pressures driven largely by external shocks.
Although inflation has risen marginally for two consecutive months, the committee expressed confidence that the trend would ease over time, describing the current inflationary pressures as largely temporary.
“The MPC recognises its transitory nature and remains confident that the current macroeconomic environment is sufficiently robust to support a return to disinflation”, Cardoso said.
The CBN governor noted that the committee paid close attention to the spillover effects of the Middle East crisis, which he said had exerted upward pressure on energy prices, transportation costs and logistics globally.
He, however, stated that the impact on the Nigerian economy had remained relatively muted due to earlier policy measures and reforms implemented to strengthen macroeconomic stability.
The MPC stressed the need to sustain existing monetary tightening measures to consolidate gains recorded in stabilising the foreign exchange market, moderating inflation expectations and restoring investor confidence.
The decision to hold rates steady comes amid continued concerns over inflationary pressures, exchange rate volatility and global economic uncertainties affecting emerging markets.
The committee reaffirmed its commitment to closely monitor both domestic and international economic developments and take appropriate measures aimed at ensuring price stability and sustainable economic growth.
Meanwhile, the apex bank Governor Olayemi Cardoso, has urged banks to remain vigilant and take proactive measures against emerging risks following the conclusion of the banking sector recapitalisation exercise.
Cardoso made the call while announcing the outcome of the Monetary Policy Committee ,MPC, meeting, where the committee retained the Monetary Policy Rate ,MPR, at 26.5% amid sustained inflationary pressures and global economic uncertainties.
According to him, the MPC welcomed the successful recapitalisation exercise, which resulted in the emergence of 33 stronger banks with improved financial soundness indicators and greater capacity to support economic growth.
However, he warned that the strengthening of balance sheets must be matched with strong risk management frameworks to safeguard financial system stability.
“The MPC also noted with satisfaction the successful conclusion of the banking recapitalisation exercise, which culminated in the emergence of 33 banks with stronger financial soundness indicators enhancing their capacity to support the economy”, Cardoso said.
He added that the committee “cherged the banks to remain proactive and adopt necessary measures to address potential post-recapitalisation risks towards preserving financial system stability”.
The committee, which had all 11 members in attendance, had retained the MPR at 26.5%, the standing facilities corridor at +500 and -100 basis points, and maintained the Cash Reserve Ratio ,CRR, for Deposit Money Banks at 45%, 16% for merchant banks, and 75% for non-TSA public sector deposits.
Cardoso said the decisions were based on a “comprehensive assessment of risks to the outlook”, noting that despite marginal increases in inflation, the broader macroeconomic environment remained stable.
Although inflation has risen for two consecutive months, he said the committee viewed the trend as largely temporary.
“Although inflation has risen marginally for two consecutive months, largely induced by external shocks, the committee recognises its transitory nature and remains confident that the current macroeconomic environment is sufficiently robust to support a return to disinflation”, he stated.
The MPC noted that headline inflation rose to 15.69% in April 2026 from 15.38% in March, driven mainly by food prices.
Food inflation climbed to 16.06% from 14.31%, reflecting higher transportation and logistics costs as well as seasonal factors.
Core inflation, however, eased to 15.86% in April from 16.21% in the previous month, while the 12-month average inflation rate slowed to 19.16% from 20.05%.
The committee also highlighted spillover effects from the Middle East crisis, which have pushed up global energy and logistics costs. However, it said the impact on Nigeria had been muted due to earlier policy reforms.
“These include exchange rate stability, improvements in external reserve buffers, strengthened monetary policy transmission, a well-capitalised banking system and ongoing fiscal consolidation, which have significantly bolstered the economy’s ability to absorb external shocks”, Cardoso explained.
The MPC also welcomed Nigeria’s recent sovereign rating upgrade, describing it as evidence of improving macroeconomic fundamentals and reform credibility.
It noted that a cautious and vigilant policy stance remains necessary to anchor inflation expectations and maintain macroeconomic stability.
“The committee was therefore convinced that the essential conditions for price stability remain firmly in place”, Cardoso said, adding that policymakers will continue to monitor both domestic and global developments closely.
