The Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 26.5 per cent amid an upward trend in inflation.

The CBN Governor, Yemi Cardoso, while speaking at the end of a two-day meeting, defended the apex bank’s decision to retain key monetary parameters, insisting that recent inflationary pressures were temporary and largely driven by external shocks rather than domestic policy failures.

Cardoso said the committee voted unanimously to retain the MPR at 26.5 per cent, while also keeping the cash reserve ratio (CRR) for deposit money banks DMB) at 45 per cent and merchant banks at 16 per cent.

According to him, the MPC also retained the asymmetric corridor around the MPR at +500/-100 basis points and the CRR on non-TSA public sector deposits at 75 per cent.

The committee insisted that its decision reflected confidence that the economy remained resilient despite mounting global uncertainties, particularly the impact of geopolitical tensions in the Middle East, which had pushed up global energy and transportation costs.

Cardoso said Nigeria’s recent reforms had insulated the economy from the full impact of external shocks, pointing to improved exchange rate stability, stronger foreign reserves, tighter monetary transmission, banking sector reforms and ongoing fiscal consolidation.

He said: “Although inflation has risen marginally for two consecutive months, largely induced by external shocks, the MPC recognised its transitory nature and remained confident that the current macroeconomic environment is sufficiently robust to support a return to disinflation.”

Headline inflation rose to 15.69 per cent in April 2026 from 15.38 per cent in March, while food inflation climbed sharply to 16.06 per cent from 14.31 per cent, driven mainly by transportation and logistics costs as well as seasonal supply pressures.

Cardoso stressed that the CBN remained committed to sustaining the current policy direction, arguing that the economy had recorded 11 consecutive months of disinflation before the recent uptick.

He added: “We will sustain the course. We have seen that, by adopting the right policies, we have consistently been on a path of disinflation. This, we believe, is temporary.”

The CBN governor also reiterated the apex bank’s commitment to exchange rate stability, describing the foreign exchange market reforms introduced over the past two years as critical to rebuilding investor confidence.

According to him, daily foreign exchange market turnover has risen dramatically from about $100 million when the current administration assumed office to as high as $1 billion on some trading days, reflecting improved liquidity and transparency in the market.

He emphasised that the central bank’s interventions in the forex market accounted for only about 1.2 to 1.3 per cent of total market turnover in 2025, indicating that the market was increasingly becoming self-sustaining under the willing-buyer willing-seller framework.

Cardoso further noted that Nigeria’s external reserves rose to $49.49 billion as of May 15, 2026, from $48.35 billion at the end of March, enough to cover more than nine months of imports.

He said the recent sovereign credit rating upgrade also validated the government’s reform agenda and reinforced international confidence in Nigeria’s macroeconomic management.

Cardoso also welcomed the successful completion of the banking recapitalisation exercise, which saw 33 banks meet the new capital requirements.

He described the exercise as evidence of growing investor confidence in the Nigerian economy, revealing that domestic investors accounted for roughly 74 per cent of total capital raised during the recapitalisation process.

The CBN boss also acknowledged that a few banks were facing legal and regulatory issues and the apex bank was working to address them.

The CBN governor also disclosed that fresh credit to small and medium enterprises (SMEs) had increased in recent months as banks gradually diversified their lending portfolios away from large-ticket exposures.

He said new SME credit rose to about N199 billion in April from N153 billion in March, driven largely by retail and short-term facilities.

In response to allegations of excessive bank charges, Cardoso defended the banking industry against criticisms of excessive customer charges and stamp duties.

He insisted that stamp duty collections were statutory taxes imposed by tax authorities rather than by banks.

Nevertheless, he acknowledged growing public dissatisfaction with banking transaction alerts and multiple debit notifications, disclosing that the CBN had established consumer protection and market conduct frameworks to address customer complaints and improve banking service standards.