Nigeria’s inflation rate continued its gradual moderation in February 2026, offering cautious optimism for households and businesses. However, emerging monthly trends indicate that underlying price pressures remain active, raising concerns about the sustainability of the disinflation trajectory.
According to the latest data, headline inflation eased slightly to 15.06% year-on-year, down from 15.10% in January, extending the downward trend observed in recent months. This represents a significant decline from 26.27% recorded in February 2025, largely driven by base effects, tighter monetary conditions, and relative macroeconomic stabilisation.
Despite this annual moderation, month-on-month inflation rose sharply to 2.01%, reversing the contraction of -2.88% recorded in January. This rebound highlights renewed short-term price pressures across the economy.
Food inflation—arguably the most critical component affecting Nigerian households—mirrored this mixed trend. While food inflation slowed significantly to 12.12% year-on-year, down from 26.98% a year earlier, it surged by 4.69% month-on-month, pointing to rising food costs and continued pressure on household budgets.
Core inflation followed a similar pattern, easing to 15.88% year-on-year from 25.66% in February 2025, but increasing to 0.89% month-on-month, compared to -1.69% in the previous month.
Overall, the February inflation data reinforces a narrative of fragile disinflation, driven primarily by statistical base effects rather than a broad-based decline in price levels.
Financial Markets Overview
Money Market
System liquidity remained robust during the week, closing at ₦8.24 trillion, up from ₦6.78 trillion at the start of the week. Key rates, including Open Buy Back (OBB) and Overnight (OVN), remained stable at 22.00% and 22.33%, respectively, reflecting a relatively balanced liquidity environment. Rates are expected to remain at similar levels in the near term.
Treasury Bills Market
The Treasury Bills market recorded mixed activity, influenced by the Primary Market Auction (PMA) and investor sentiment. The Debt Management Office offered ₦1.05 trillion, attracting strong demand with subscriptions reaching ₦3.06 trillion. Stop rates held steady for 91-day bills at 15.95%, while longer tenors declined slightly. Average yields rose marginally to 17.65%, indicating cautious investor positioning.
FGN Bond Market
The Federal Government bond market traded cautiously, with investor activity shaped by inflation data and developments in the fixed income space. Yields remained broadly stable, with average benchmark yield closing at 15.60%. Market sentiment remains subdued amid macroeconomic uncertainties.
Eurobond Market
Nigeria’s Eurobond market experienced volatility driven by geopolitical tensions in the Middle East and global economic indicators. While yields fluctuated during the week, the average benchmark yield declined slightly to 7.12%, reflecting mixed investor sentiment.
Currency Market
The Naira appreciated by 0.90% week-on-week, closing at ₦1,353.90/$ at the Nigerian Foreign Exchange Market window, supported by improved market liquidity and stable inflows.
Equities Market
The Nigerian equities market posted a positive performance, with the NGX All-Share Index rising by 0.69% to close at 201,156.85, while market capitalisation stood at ₦129.1 trillion.
On a weekly basis, the market recorded a 1.39% gain, driven by strong performances in stocks such as JOHNHOLT, BUACEMENT, and PREMPAINTS. However, losses in PRESCO, DAARCOMM, and ETERNA moderated overall gains.
Year-to-date, the market has delivered an impressive 29.27% return, underscoring sustained investor interest despite macroeconomic headwinds.
Outlook
While Nigeria’s inflation outlook shows signs of improvement, the rebound in monthly price indicators suggests that inflationary pressures remain entrenched. This presents a delicate balancing act for monetary authorities, who must weigh the need to support economic growth against the risk of renewed inflation acceleration.
