Inflation falls to 15.39% as CBN cuts policy rate to 23%

Nigeria’s headline inflation rate fell to 15.39 per cent in August 2026, down from 23.14 per cent a year earlier, a fall accompanied by the first cut in the Central Bank of Nigeria’s benchmark interest rate.

On 22 September the CBN cut its Monetary Policy Rate, the benchmark for borrowing costs across the economy, from 26.5 per cent to 23 per cent.

The year-on-year fall amounts to 7.75 percentage points, while the September decision lowered the policy rate by 3.5 percentage points in a single move.

Single digits the goal

A government minister said in October that the administration’s policy reforms are aimed at bringing inflation down to single digits. The CBN has set a target of 12.9 per cent.

President Bola Ahmed Tinubu has pointed to the fall in inflation, alongside growth of about 4 per cent, as evidence that his economic reforms are working.

What a lower rate means

A lower policy rate generally makes credit cheaper for businesses and households. The President has defended the reforms of his first term, including the removal of the petrol subsidy, as necessary.

Speaking to youth supporters on 19 October, the President rejected calls to revive the subsidy, saying: “No, Nigeria will go bankrupt.” He also criticised past Ways and Means financing by the central bank. “We printed currencies as if there was no tomorrow,” he said.

The World Bank, in its October Nigeria Development Update, said economic gains must be sustained and noted that inflation is still elevated. It reported growth of 4.2 per cent in the first half of 2026 and a rise in gross external reserves to $53.8 billion at the end of August.

With the presidential election set for 16 January 2027, the direction of prices is likely to remain one of the defining questions of the campaign.

Sources

This report is compiled from the public news reports and official statements listed above. Quotes and figures are attributed to those who made them.