Pre-MPC Commentary: Market Expectations Ahead of the 305th CBN Monetary Policy Committee Meeting
The CBN’s Monetary Policy Committee convenes its second sitting of 2026 against a backdrop that has shifted meaningfully since the February meeting. When eleven of the twelve MPC members voted unanimously to cut the MPR by 50 basis points to 26.50% in February, they were acting on a disinflation signal that had been building through the second half of 2025; one that Proshare Research had tracked and anticipated in our own pre-MPC commentary. That cut was, in our assessment, the right call at the right time: a carefully calibrated step toward normalising the cost of money without sacrificing the credibility the Committee had earned through a sustained period of aggressive tightening.
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Three months on, the economic terrain is more complicated. Inflation has re-accelerated over the past two months, interrupting what had been an encouraging disinflation trajectory. Global oil markets are once again volatile, stoked by geopolitical tensions linked to the Iran conflict. Nigeria’s gross reserves have contracted for a second consecutive month. And election-cycle fiscal spending is beginning to seep into the domestic liquidity system, adding upward pressure to money-market conditions. In this environment, the MPC faces not a binary choice between tightening and easing, but the more nuanced task of communicating why doing nothing is, in fact, doing something
At its first meeting of the year, held in February 2026, the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) cut the monetary policy rate (MPR) by 50 basis points (bps) to 26.50%. The outcomes of the CBN MPC meeting aligned with our expectations and prevailing market consensus for a rate cut.
Key Decisions from the February 2026 MPC Meeting:
- Monetary Policy Rate (MPR) reduced by 50bps to 26.50%.
- Cash Reserve Ratio (CRR) retained at 45.00% for commercial banks
- Retained Merchant Banks CRR at 16.00%
- Retained 75% CRR on Non-TSA public sector deposits
- Liquidity Ratio (LR) left unchanged at 30.0%.
- Retain asymmetric Corridor at +50/-450 basis points around the MPR (see table 1 below).
The February 2026 decision was unanimous across all eleven of the committee’s twelve members, who were present.
Chart 3:
Analysts’ Expectations on the CBN MPC Interest Rate Decision
Dr Wilson Erumebor – NESG
“I expect the MPC to hold. The recent uptick in inflation to 15.68% suggests that inflationary pressures should be a major concern. The renewed pressure is linked to higher fuel and transport costs, exchange rate sensitivity and external conditions from rising global oil prices linked to the Iran conflict. Under this environment, the CBN is likely to prioritise price and exchange rate stability.”.
Seyi Akinbi –Investment Analyst
“The MPC is expected to maintain its hawkish stance at the next MPC meeting in the light of recent inflationary pressures and heightened election spending that is likely to trigger further liquidity surpluses in the money markets.”
Dr Muda Yusuf – CEO, Centre for Promotion of Private Enterprise
“…the Committee may be inclined towards a cautious tightening bias or a prolonged retention of the current tight monetary stance in order to contain inflation expectations, reinforce policy credibility and sustain investor confidence. However, the Centre for the Promotion of Private Enterprise [CPPE] is deeply concerned about the implications of any additional monetary tightening for economic growth, private sector investment, industrial productivity and employment generation.”
AAG Capital Limited
“…we expect the Monetary Policy Committee to maintain a hold stance at its May 19
20 meeting to preserve FX stability, sustain foreign portfolio inflows and anchor inflation expectations, supporting a gradual and cautious disinflation path through the rest of 2026.”
CSL Stockbrokers Limited
“Against the backdrop of a challenging external environment and the recent reacceleration in inflation over the last two months, we anticipate that the MPC will leave the Monetary Policy Rate (MPR) unchanged at its current level of 26.5%.”
Meristem Research
“We expect the MPC to maintain a HOLD stance, given underlying inflationary pressures and the need to sustain macroeconomic stability. While a rate cut would ordinarily improve the current bullish momentum in the equities market, the prevailing price pressures constrain such policy easing. As a result, maintaining rates at current levels should help preserve existing liquidity conditions without raising corporate financing costs. Consequently, market sentiment is expected to remain broadly stable, with the prevailing positive momentum in the equities market likely to persist in the near term.”
Proshare Research
“We expect the CBN MPC to maintain the policy rate at 26.50%, reflecting a cautious stance amid persistent global energy shocks and a two-month deviation in inflation from the disinflation trend observed throughout 2025 and at the beginning of 2026. We believe the Committee’s decision at its May 2026 meeting will be influenced by the impact of recent global energy market disruptions on domestic liquidity conditions, particularly across all domestic liquidity segments of the economy, including the equities market, bond market, banking sector liquidity, and net foreign reserve position.”
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Adapted from the Proshare
