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By Chinwendu Obienyi
The Central Bank of Nigeria (CBN) has once again expressed optimism that inflation will return to a downward path in the near to medium term, as ongoing reforms, tighter monetary policy measures, exchange rate stability and improved macroeconomic conditions continue to support the economy.
This was disclosed in its Frequently Asked Questions (FAQs) on the Monetary Policy Committee (MPC) meeting held on May 19–20, 2026, where the committee retained all major policy parameters, including the Monetary Policy Rate (MPR) at 26.5 per cent. The MPC also maintained the Cash Reserve Ratio (CRR) at 45 per cent for Deposit Money Banks and 16 per cent for Merchant Banks, while keeping the asymmetric corridor at +50/-450 basis points.
According to the CBN, the decision reflected a cautious, data-dependent approach aimed at consolidating previous monetary tightening gains, anchoring inflation expectations, and safeguarding macroeconomic stability amid global uncertainties and domestic price pressures.
The apex bank acknowledged that headline inflation increased marginally to 15.69 per cent year-on-year in April 2026 from 15.38 per cent in March. It attributed the rise largely to higher food prices, energy costs, transportation, and logistics pressures.
However, the CBN said the recent uptick in inflation should be viewed as temporary, noting that underlying indicators point to a gradual moderation in inflationary pressures.
It explained that month-on-month headline inflation slowed significantly to 2.13 per cent, while core inflation also moderated. The bank added that the 12-month average inflation rate declined further to 19.16 per cent in April 2026, marking the sixth consecutive month of improvement.
“This suggests that the medium- to long-term disinflationary path remains firmly in place and inflation persistence risks are declining,” the CBN stated.
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The bank linked recent inflation pressures partly to external developments, particularly the Middle East crisis, which has affected global energy, transportation, and logistics costs. However, it said the impact on Nigeria’s economy has remained limited due to stronger domestic buffers.
Nigeria’s external reserves had stood at $49.49 billion as of May 15, 2026, providing about 9.04 months of import cover. Currently, it is sitting at $51.25 billion.
The CBN described the reserves’ position as robust and adequate to support economic stability and cushion external shocks. According to the bank, improved foreign exchange market conditions had driven the naira to experienced greater stability.
It added that ongoing FX reforms, improved liquidity, and enhanced market transparency has contributed to the market growth in recent months.
“Recent reforms, including exchange rate reforms, monetary tightening, fiscal consolidation efforts, and strengthened policy transmission mechanisms, have improved Nigeria’s capacity to absorb global shocks”, the FAQ read.
On the banking sector, the CBN said the recapitalisation exercise had been successfully concluded, resulting in 33 stronger and more resilient banks. The exercise, according to the bank, attracted both domestic and international investors, strengthening confidence in the financial system.
The CBN maintained that a stronger banking sector would enhance lending capacity, deepen financial intermediation, and support sustainable economic growth.
It expressed confidence that improving fundamentals, stronger external buffers, exchange rate stability, and ongoing reforms would sustain economic resilience and support the return of inflation to a declining trajectory.
