‎By Onu Okorie

‎The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, has said that the Monetary Policy Committee (MPC) has again retained the monetary policy rate MPR at 26.5 per cent.

‎A communique made available to the media explained that the CBN governor, announced the committee’s decision at a press conference on Tuesday after the panel’s 306th meeting in Abuja.

‎The MPC also retained the asymmetric corridor around the MPR at +500/-100 basis points, the cash reserve ratio (CRR) at 40.5 per cent for deposit money banks and 16 per cent for merchant banks, while leaving the liquidity ratio unchanged at 30 per cent.

‎Explaining the decision, Cardoso said maintaining the current policy stance would enable it to assess incoming economic data before making further adjustments.

‎“The committee’s decision to maintain the current policy stance followed a thorough assessment of the balance of risks. Although the headline inflation moderated marginally in June 2026, global uncertainties have heightened due mainly to the renewed hostilities in the Middle East. In view of the evolving developments, maintaining a cautious monetary policy stance remains appropriate,” the CBN governor said.

‎Cardoso also explained that while geopolitical tensions continue to pose upside risks to inflation, Nigeria’s economy has remained resilient due to reforms implemented by both fiscal and monetary authorities.

‎“Available evidence suggests that the Nigerian economy has remained largely resilient to the external shocks, reflecting the gains from prior reforms implemented by the fiscal and monetary authorities,” the governor said.

‎He said the committee also acknowledged improved coordination between the Federal Government and the CBN, saying stronger policy alignment would enhance macroeconomic stability.

‎According to him, “members thus noted that greater alignment between fiscal and monetary policies would enhance policy effectiveness and support the achievement of overall macroeconomic objectives.”

‎Responding to questions on the foreign exchange market, Cardoso said the CBN would continue to pursue policies that ensure a transparent, liquid and market-driven exchange rate system based on a willing-buyer, willing-seller framework.

‎He stressed that the exchange rate remains market-determined and would ultimately be influenced by economic fundamentals rather than administrative controls.

‎”The price is a moving target,” Cardoso said, noting that where the exchange rate eventually settles would depend on improvements in key economic indicators.

‎According to him, stronger oil production and exports, increased foreign direct investment, and higher domestic productivity that reduces import dependence are among the critical fundamentals needed to strengthen the naira over time.

‎Cardoso said the CBN was satisfied with the progress made in the foreign exchange market, describing it as fully functional, open and transparent.

‎He disclosed that daily turnover in the market sometimes exceeds one billion dollars, which he said reflects growing confidence and improved liquidity.

‎The CBN Governor maintained that Nigeria requires a competitive currency and expressed confidence that the current market structure provides the appropriate foundation for sustainable exchange rate stability.

‎On the introduction of the Nigeria Foreign Overnight Rate Average (NOFA), Cardoso described the benchmark as an important reform designed to improve transparency in the country’s financial markets.

‎He explained that NOFA reflects the actual cost of overnight secured funding between banks based on real transactions rather than estimates or judgement-based submissions.

‎According to him, the new benchmark aligns Nigeria with global best practices, similar to the transition from the London Interbank Offered Rate (LIBOR) to transaction-based reference rates adopted in major financial markets such as the United Kingdom and the United States.

‎Cardoso said the benchmark would strengthen the transmission of monetary policy and support the CBN’s long-term inflation-targeting framework.

‎He added that greater synergy is expected between the Monetary Policy Rate and NOFA as the financial market continues to deepen.