THE Central Bank of Nigeria (CBN) has lowered its benchmark interest rate for the second time in five months, reducing the Monetary Policy Rate (MPR) to 26.5 percent as inflation shows early signs of slowing and authorities move to support economic growth.

CBN Governor Olayemi Cardoso announced the decision on Tuesday at the end of the two-day Monetary Policy Committee (MPC) meeting in Abuja. The move reflects a cautious shift toward monetary easing following an extended period of tight policy aimed at curbing price pressures and stabilising the foreign exchange market.

Latest figures appear to have strengthened the case for the rate cut. Data from the National Bureau of Statistics (NBS) show that headline inflation moderated slightly to 15.10 percent in January 2026, down from 15.15 percent in December 2025. Although marginal, the slowdown has bolstered expectations that the apex bank could gradually adopt a more accommodative stance if disinflation continues.

Tuesday’s decision follows an earlier reduction in September 2025, when the MPR was trimmed from 27.5 percent to 27 percent – the first rate cut in years. Prior to that, the last easing occurred in September 2020, when the benchmark rate was reduced from 12.5 percent to 11.5 percent to cushion the economic impact of the COVID-19 pandemic.

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In the years after 2020, the CBN maintained a largely hawkish posture, raising rates several times to tackle persistent inflationary pressures and currency volatility.

Despite the latest adjustment, other monetary policy parameters were left unchanged. The asymmetric corridor remains at +50/-450 basis points around the MPR. The Cash Reserve Ratio was retained at 45.00 percent for Deposit Money Banks and 16.00 percent for Merchant Banks, while the Liquidity Ratio stays at 30.00 percent.

Analysts at Coronation Merchant Bank said the softer policy stance could lend support to the fixed-income market, noting that easing yields may improve investor sentiment in the near term.