Why did the Central Bank of Nigeria decide to hold its benchmark interest rate at 26.5% in its latest monetary policy meeting?

The Central Bank of Nigeria maintained its benchmark interest rate at 26.5% to contain inflation, which had accelerated to a five-month high of 15.7% in April—driven primarily by higher domestic energy costs following the US-Israel attacks on Iran at the end of February, which caused global oil prices to surge about 50% and pushed up gasoline, diesel, food, and transport costs. Governor Olayemi Cardoso stated that the Monetary Policy Committee (MPC) adopted a 'cautious and vigilant policy stance' to anchor inflation expectations and safeguard macroeconomic stability, emphasizing continued focus on reducing inflation to below 10%. Although the bank had cut rates by 100 basis points since September, it judged that preserving recent gains against inflation warranted a 'tighter-for-longer' stance amid uncertainty over the duration of the Iran conflict.

What measures has the Nigerian government taken to mitigate the impact of rising fuel and food prices on consumers?

To cushion the impact of rising prices, the Nigerian government has cut levies on selected food and pharmaceutical products, while explicitly stating it will not restore fuel subsidies abolished three years ago when President Bola Tinubu assumed office. Central Bank Governor Olayemi Cardoso credited ongoing economic reforms with significantly bolstering the economy’s ability to absorb external shocks, noting that these reforms have 'significantly mitigated' the pass-through of global commodity and energy price shocks to domestic inflation.

Nigeria Maintains Benchmark Interest Rate as Iran Conflict Drives Fuel Prices Higher

May 20, 2026

Nigeria's Central Bank maintained its benchmark interest rate at 26.5% to curb inflation driven by rising fuel costs linked to the Iran conflict, while reducing levies on select food and pharmaceutical products.

bloomberg

2026-05-20

Nigeria Maintains Benchmark Interest Rate as Iran Conflict Drives Fuel Prices Higher

Nigeria Maintains Benchmark Interest Rate as Iran Conflict Drives Fuel Prices Higher

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