The Monetary Policy Committee of the Central Bank of Nigeria (CBN) has slashed the monetary policy rate (MPR) by 50 basis points to 26.5 per cent, citing the deceleration of food and core inflation for 11 consecutive months.
The MPC also retained the cash reserve ratio (CRR) at 45 per cent for commercial banks and 16 per cent for merchant banks. Liquidity ratio (LR) was retained at 30 per cent while the standing facilities corridor was retained at +50/-450 basis points around the MPR.
Speaking after the two-day meeting in Abuja yesterday, the CBN governor, Olayemi Cardoso, also ruled out extending the timeframe for the bank recapitalisation exercise.
He anchored his position on the fact that 20 banks have met the various licence categories outlined by the apex bank.
Apart from the 20 banks that have fully recapitalised, he said, 13 others are at various stages of the recapitalisation. The CBN boss disclosed that out of the N4.05 trillion raised by the 20 banks, N2.9 trillion, representing 71.6 per cent, was sourced from the domestic market.
He explained: “As of February 19, 2026, total verified and approved capital raised stands at N4.05 trillion. Of this, N2.9 trillion, which is 71.6 per cent, has been mobilised domestically, with $706.84 million, which is 1.15 trillion naira, representing 28.33 per cent foreign. So, in summary, 71.67 per cent is domestic mobilisation and 28.33 per cent is foreign participation.”
The recapitalisation exercise requires banks to meet significantly higher minimum capital requirements by March 31, 2026. The move, aimed at strengthening financial stability, requires up to N500 billion for international banks, N200 billion for national banks and N50 billion for regional banks, with many institutions opting for rights issues and mergers to comply.
The move is designed to ensure banks have sufficient capital to withstand economic shocks, support a $1 trillion economy target and increase lending capacity.
The CBN chief warned that increased fiscal releases, including election-related spending, could pose upside risks to the inflation outlook.
Cardoso said there were notable improvements in the external sector, with gross external reserves rising to $50.45 billion as of February 16, 2026, which is the highest in 13 years.
“The committee particularly noted the remarkable performance of Nigeria’s external sector, evidenced by robust accretion to foreign exchange reserves, supported by higher export earnings and increased remittance inflows,” he said.
Cardoso cited improved macroeconomic fundamentals, stronger trade performance and renewed market confidence as key drivers of the external reserves’ growth.
Providing more insights into the major drivers of fine rebound, the CBN governor pointed to the elimination of multiple exchange-rate windows and cleared backlogs of foreign exchange obligations, adding that the measures had strengthened transparency and improved the efficiency of the FX market.
“There will always be risks. We cannot underestimate global shocks such as oil price volatility, geopolitical tensions and domestically, pre-election spending, if not properly contained, can destabilise what we have achieved.”
With the clamour for more spending on infrastructure and payment for contracts rising, the CBN warned that fiscal deficits must be carefully managed to avoid undermining monetary stability.
