UPDATED: Cautious monetary policy stance remains appropriate amid global uncertainties, says Cardoso

The Governor of Central Bank of Nigeria (CBN) Mr. Olalyemi Cardoso on Tuesday said a cautious monetary policy stance remains appropriate  as global uncertainties have heightened due mainly to the renewed hostilities in the Middle East.  

He noted that the Monetary Policy Committee’s (MPC) decision to maintain the current policy stance followed a thorough assessment of the balance of risks, stressing that the headline inflation moderated marginally in June 2026, influenced by global uncertainties .

At the end of the MPC  meeting,  the members voted to :  

1  Retain the Monetary Policy Rate at 26.5 per cent.

2. Retain the Standing Facilities Corridor around the MPR at +50/-450 basis points.

3. Retain the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 per

cent, Merchant Banks at 16.00 per cent, and non-TSA public sector deposits at 75.00per cent. 

The CBN Governor  in his communique, said, “In arriving at its decision, the Committee noted the recent resurgence of hostilities in the Middle East with particular attention to its spillover effects on global energy prices and the potential pass-through to domestic inflation. 

“Notwithstanding the development, available evidence suggests that the Nigerian economy has remained largely resilient to the external shocks, reflecting the gains from prior reforms implemented by the fiscal and monetary authorities. 

“However, maintaining the current monetary policy stance will provide an opportunity to closely monitor incoming data and assess the trajectory of inflation to guide future policy decisions.”

He explained further that,  “The MPC acknowledged the Federal Government’s renewed commitment to strengthening policy coordination, with particular emphasis on the ongoing collaboration with the monetary authority which has helped to moderate the impact of the Middle East crisis on the domestic economy. Members thus, noted that greater alignment between fiscal and monetary policies would enhance policy effectiveness and support the achievement of overall macroeconomic objectives.

“To further strengthen macroeconomic fundamentals, the Committee underscored the potential benefits of Executive Order 9. 

“Members further commended Government’s renewed efforts in improving crude oil production and encouraged relevant agencies to strengthen the implementation of reforms to maximize the potentials in other sectors, such as solid minerals, to complement Government earnings.

“The MPC welcomed the positive outcome of the banking sector recapitalisation exercise, noting the improvement in the resilience of the banking system as reflected in key prudential and financial soundness indicators. 

“It nevertheless urged the Bank to sustain effective surveillance to preserve financial sector soundness and mitigate potential risks to financial stability.”

He noted that the output growth is projected to remain resilient in 2026, anchored on the recent improvement in crude oil production, expansionary Purchasing Managers Index and the positive impact of

timely policy reforms. 

“Inflation is projected to moderate further in the medium term on the back of continued stability in the foreign exchange market, lagged effect of previous monetary policy tightening and improved food supply conditions as the harvest season approaches.

“The key risk to the outlook, however, remains the severe and prolonged escalation of the Middle East conflict. In the light of these considerations, the Committee reaffirmed its commitment to preserve price and financial system stability and remains prepared to take appropriate policy measures, guided by evolving macroeconomic conditions, ” he added.