The Central Bank of Nigeria (CBN) has voted to retain the Monetary Policy Rate (MPR) at 27.5%, following its 300th Monetary Policy Committee (MPC) meeting held in Abuja.
This was disclosed by the apex bank’s Governor Olayemi Cardoso during the post-MPC press briefing on Tuesday.
Key Monetary Policy Decisions:
- Monetary Policy Rate (MPR): Retained at 27.5%, reflecting the committee’s conservative policy stance.
- Asymmetric Corridor: Maintained at +500/-100 basis points around the MPR.
- Cash Reserve Ratio (CRR): Held at 50% for Deposit Money Banks and 16% for Merchant Banks.
- Liquidity Ratio: Left unchanged at 30%.
All 12 MPC members voted unanimously to maintain current policy rates, the CBN stated.
The decision demonstrates the committee’s cautious approach to monetary management, as it continues to assess prevailing macroeconomic conditions and the effectiveness of recent tightening measures.
The CBN highlighted the recent moderation in Nigeria’s inflation rate, which eased to 23.71% in April 2025 from 24.23% in March, according to the latest data from the National Bureau of Statistics (NBS).
Experts’ projections
Nairametrics had earlier predicted the CBN’s decision to retain the MPR at 27.5%.
Mr. Olaitan S. Sunday, Managing Director of Rostrum Investment & Securities Ltd, earlier told Nairametrics that the decision aligns with expectations.
“Holding the MPR at 27.5% will continue to support the naira, anchor inflation expectations, and bolster investor confidence in the Nigerian economy,” he said.
David Adonri, Vice Chairman of the Board at Highcap Securities, emphasized that underlying structural issues may influence future policy.
“The outcome of the next MPC meeting may not reflect moderating inflation because foreseen threats to the economy require a proactive response. Demand-side pressure remains too high compared to supply,” he noted.
Afrinvest’s Head of Research, Damilare Asimiyu, similarly expects a hold, citing key cost-side improvements.
“We forecast a moderate decline in May inflation, aided by relative exchange rate stability and the recent reduction in pump prices by Dangote Refinery from N835 to N825 per litre. This should modestly reduce business operating costs and improve household purchasing power,” the analyst said.
What This Means for the Economy
The CBN’s decision to hold rates steady signals its focus on maintaining price stability while cautiously supporting economic recovery.
- By maintaining current rates, the bank is giving room for existing policies to yield results before implementing further adjustments.
- According to the MPC communiqué, the committee emphasized the importance of coordinated efforts between fiscal and monetary authorities to sustain economic growth and manage inflationary pressures.
- Market analysts suggest any potential rate cuts will depend on inflation trends and exchange rate stability over the coming months.
If inflation continues to moderate and the foreign exchange market stabilizes, the CBN may consider a more accommodative policy stance in the second half of the year.
Market snapshot
Ahead of the MPC meeting, Nairametrics reported that the naira appreciated slightly to N1,597/$1 at the official foreign exchange market on Monday, up from Friday’s closing rate of N1,599.01/$1 — a signal of investor optimism about the CBN’s ongoing stabilization efforts.
The next MPC meeting is scheduled for 21-22 July 2025.
