… Nigeria’s external reserves rebound to $49.49 billion in May
…CPPE lauds CBN for retaining interest rate at 26.5% amid global economic uncertainty
By Seun Ibiyemi
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 26.5 per cent following the conclusion of its 305th meeting.
The decision was announced by CBN Governor Olayemi Cardoso after the MPC meeting held in Abuja, where 11 committee members were in attendance.
The committee also retained all other key monetary policy parameters, reflecting a cautious approach as policymakers continue to monitor inflationary pressures and broader macroeconomic conditions.
The CBN said the decision to hold rates steady was influenced by persistent inflationary pressures and the need to sustain macroeconomic stability.
The Cash Reserve Ratio (CRR) was maintained at 45 Per cent for commercial banks and 16 per cent for merchant banks.
The Standing Facilities Corridor was retained at +50/-450 basis points around the MPR.
The apex bank also retained the CRR on non-TSA public sector deposits at 75 per cent.
The committee noted the recent rise in inflation figures, particularly the back-to-back increases recorded in March and April 2026.
He also said that the Nigeria’s gross external reserves rose to $49.49 billion as of May 15, 2026, marking a rebound from $48.35 billion recorded at the end of March 2026.
The latest increase signals easing pressure on monetary authorities as they continue balancing exchange rate stability, liquidity management, and external obligations.
Speaking after the MPC meeting, Cardoso said the country’s current reserve level remains strong enough to cover more than nine months of imports for goods and services.
“Gross external reserve remained robust at $49.49 billion as of May 15, 2026, compared with $48.35 billion at the end of March 2026, sufficient to cover 9.04 months of imports for goods and services.”
“This strong buffer continues to reinforce investor confidence in the Nigerian economy and support exchange rate stability,” Cardoso stated.
He added that the reserve position reflects improving confidence in Nigeria’s foreign exchange management framework.
Nigeria’s external reserves had faced sustained pressure in recent weeks before the latest rebound.
Data from the CBN showed that reserves declined by about $855 million within five weeks, dropping from $49.18 billion on April 1, 2026, to $48.33 billion as of May 7, 2026.
The reserves fell from $49.133 billion on April 2 to $48.940 billion on April 7, before declining further to $48.675 billion on April 15.
External reserves weakened to $48.541 billion on April 20 and later dropped to $48.364 billion by April 30.
By May 7, reserves had settled at $48.325 billion, raising concerns about the sustainability of FX inflows amid rising demand pressures.
Despite the decline recorded during the period, reserve levels remained significantly higher than the position recorded during the same period in the previous year.
In a swift response, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE) , Dr Muda Yusuf commended the Central Bank of Nigeria (CBN) for retaining all key monetary policy parameters at the 305th meeting of the Monetary Policy Committee (MPC), describing the decision as pragmatic and reflective of a deeper understanding of Nigeria’s inflation challenges.
He said the decision to retain the Monetary Policy Rate (MPR) at 26.5 per cent demonstrated policy maturity and strategic restraint at a time of heightened global economic uncertainty.
According to Yusuf, the current inflationary pressures facing the Nigerian economy are largely structural and externally induced, particularly due to rising geopolitical tensions involving Iran, Israel and the United States, which have triggered volatility in global energy prices.
He noted that the increase in crude oil prices has transmitted severe cost pressures into domestic energy prices, transportation, logistics and manufacturing operations, stressing that inflation is currently being driven more by supply-side disruptions than by excess domestic demand.
“Monetary policy is a powerful stabilisation instrument, but it cannot repair supply chains, resolve geopolitical conflicts or eliminate structural bottlenecks in production and distribution,” the CPPE boss stated.
He warned that excessive monetary tightening at this stage could weaken productivity, constrain investment and undermine employment generation, arguing that economic growth depends more on productivity, enterprise and policy coherence than on high interest rates.
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He also applauded the CBN for what it described as disciplined management of the monetary policy framework and the relative stability recorded in the foreign exchange market in recent months.
Yusuf said exchange rate stability had become a critical anchor for macroeconomic confidence, helping to moderate imported inflation, improve investor sentiment and reduce speculative activities in the market.
He further described the apex bank’s recent policy direction as a transition from “crisis management to confidence management,” which he said is essential for rebuilding investor trust in the Nigerian economy.
The organisation equally commended fiscal authorities for renewed efforts towards fiscal consolidation and improved revenue performance, noting that stronger fiscal discipline would help reduce deficits and dependence on debt financing.
On the banking sector recapitalisation programme, the CPPE praised the CBN for ensuring a seamless implementation process without triggering depositor panic, systemic anxiety or shareholder uncertainty.
According to Yusuf, the recapitalisation exercise is aimed at strengthening the financial system to support industrialisation, infrastructure financing and long-term economic transformation.
He, however, urged the apex bank to sustain clear communication and continuous reassurance for banks still facing transitional recapitalisation issues in order to maintain public confidence in the financial system.
He maintained that the outcome of the 305th MPC meeting reflected a balanced policy approach designed not only to curb inflation but also to support investment, competitiveness, industrialisation and sustainable job creation in the country.
