…Says Forbearance Era Over as Reserves Hit $52.5bn

By Emma Ujah, Abuja Bureau Chief

The Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 26.5 per cent, citing the need for a cautious monetary policy stance amid global economic uncertainties.

CBN Governor, Mr. Olayemi Cardoso, announced the decision on Tuesday at the end of the 306th meeting of the Monetary Policy Committee (MPC) held in Abuja.

The committee also retained the standing facilities corridor at +50/-450 basis points around the MPR.

Similarly, the Cash Reserve Requirement (CRR) was maintained at 45 per cent for Deposit Money Banks, 16 per cent for Merchant Banks, and 75 per cent for non-Treasury Single Account (TSA) public sector deposits.

Why CBN retained rate

Cardoso said the decision followed a careful assessment of prevailing economic risks, including renewed geopolitical tensions in the Middle East and their possible impact on global energy prices and domestic inflation.

He said, “Although 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 noted that despite external pressures, the Nigerian economy had remained resilient due to gains from reforms implemented by both fiscal and monetary authorities.

According to him, maintaining the current policy stance would enable the apex bank to monitor economic data and determine future policy direction.

He added that the MPC welcomed the Federal Government’s renewed commitment to stronger policy coordination, particularly collaboration between fiscal and monetary authorities, which he said had helped reduce the impact of the Middle East crisis on the Nigerian economy.

Cardoso said members of the committee also commended efforts to improve crude oil production and urged relevant agencies to intensify reforms in other sectors, including solid minerals, to boost government revenue.

Forbearance has outlived its usefulness

The CBN governor, while responding to questions from journalists, said the regulatory forbearance granted to banks during the COVID-19 period had been discontinued because it had served its purpose.

According to him, the policy had “outlived its time” and was no longer necessary in assessing the health of the banking sector.

“Forbearance, we felt, had outlived its time. Many of you will recall this is something that came as a result of COVID. And now we are in 2026; we did not see the reason why that should continue to form part of the analysis of the banking system,” he said.

Cardoso explained that banks had begun recalibrating their portfolios following the end of the policy, leading to a temporary reduction in outstanding risk assets.

He, however, assured that the development was part of a transition towards a stronger and more sustainable credit environment.

“It reflects a transition to a more sustainable and better quality credit environment, which is what we all want. We don’t want unanticipated shocks that come in a boom-and-bust fashion,” he said.

External reserves rise to $52.5bn

The CBN governor also disclosed that Nigeria’s external reserves had risen to $52.5 billion, enough to finance about nine months of imports.

He said the level was significantly above the internationally recommended threshold of three months of import cover.

On the naira exchange rate, Cardoso said the foreign exchange market had deepened and was now operating on a transparent willing-buyer, willing-seller basis.

He said the apex bank remained committed to maintaining a liquid and functional foreign exchange market, adding that daily market turnover sometimes exceeded $1 billion.

According to him, the long-term stability of the naira would depend on key economic fundamentals, including increased oil exports, foreign direct investment, and improved domestic productivity to reduce dependence on imports.