The Central Bank of Nigeria (CBN) is expected to maintain its benchmark Monetary Policy Rate (MPR) at 26.50 per cent when the Monetary Policy Committee (MPC) meets on July 20 and 21, as policymakers weigh rising domestic inflation against growing global geopolitical risks, according to the Economic Intelligence Unit of Access Bank Plc.
In its July 2026 Pre-MPC Communiqué, the bank said the current macroeconomic environment supports retaining a tight monetary policy stance to safeguard price stability, despite signs of resilience in some areas of the economy.
Access Bank expects the MPC to leave all key monetary policy parameters unchanged, including retaining the asymmetric corridor at +50/-450 basis points around the MPR, the Cash Reserve Ratio (CRR) for Deposit Money Banks at 45 per cent, the CRR for Merchant Banks at 16 per cent, and the Liquidity Ratio at 30 per cent.
According to the report, inflation remains the biggest domestic policy challenge, having risen for the third consecutive month to 15.93 per cent in May 2026 from 15.69 per cent in April. Food inflation also accelerated to 16.96 per cent, while core inflation increased to 16.82 per cent, reflecting persistent pressure from transportation costs, agricultural inputs and fuel prices.
The report noted that the renewed escalation of hostilities involving the United States and Iran has heightened uncertainty in global financial and commodity markets after a brief period of stability, increasing the risks of higher crude oil prices, rising freight costs and imported inflation.
It said these developments have complicated the policy environment ahead of the July MPC meeting, forcing policymakers to balance inflation control with the need to sustain economic growth.
“Taking these developments into account, we expect the MPC to maintain a cautious monetary policy stance by retaining the MPR at 26.50 per cent,” Access Bank stated.
The bank explained that maintaining current policy settings would allow the cumulative effects of previous monetary tightening to continue filtering through the economy while supporting macroeconomic and financial stability.
Despite the inflationary pressures, the report said Nigeria’s macroeconomic fundamentals have remained relatively resilient.
It noted that the naira depreciated only marginally to N1,380.64 per dollar at the end of June from N1,375.07 recorded after the May MPC meeting, while private sector credit rose to N81.04 trillion in May from N80.59 trillion in April. Broad money supply also expanded by 3.38 per cent to N129.21 trillion, reflecting continued liquidity growth within the financial system.
Access Bank, however, observed that economic activity remains below potential. Nigeria’s Composite Purchasing Managers’ Index improved slightly to 49.6 points in May from 49.4 in April but stayed below the 50-point threshold separating expansion from contraction for a second consecutive month, indicating subdued business conditions.
The report highlighted improvements in the country’s external position, with external reserves rising by 5.04 per cent to $51.46 billion, supported by stronger foreign exchange inflows, higher crude oil production and continued benefits from CBN foreign exchange reforms.
Nigeria’s crude oil production also increased to 1.53 million barrels per day in May from 1.49 million barrels per day in April, contributing to stronger export earnings despite fluctuations in international oil prices.
On economic growth, the report noted that Nigeria’s Gross Domestic Product expanded by 3.89 per cent year-on-year in the first quarter of 2026, driven by improved agricultural output, resilient services and stronger industrial performance.
Access Bank also pointed to cautious monetary policy across advanced economies. The United States Federal Reserve maintained its benchmark interest rate at 3.50 to 3.75 per cent in June, while the European Central Bank raised rates by 25 basis points amid persistent energy-driven inflation risks.
Given these domestic and global conditions, the bank concluded that maintaining the current restrictive monetary policy stance remains the most appropriate option to contain inflation, preserve exchange rate stability and sustain investor confidence while allowing previous policy measures to continue working through the economy.
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