The Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 27 percent, maintaining its tight monetary stance as part of ongoing efforts to rein in inflation and stabilise the foreign exchange market.
The decision was announced at the end of the Monetary Policy Committee (MPC) meeting held in Abuja, where members voted to keep key policy parameters unchanged.
The MPR, which serves as the benchmark interest rate for the economy, has remained elevated as the CBN continues its aggressive measures to curb rising prices and restore investor confidence.
Key outcomes of the 303rd CBN MPC meeting
- Monetary Policy Rate (MPR) retained at 27.00%.
- Cash Reserve Ratio (CRR) retained at 45.00% for DMBs, and retained 16.00% for Merchant Banks, respectively.
- Retained 75% CRR on Non-TSA public sector deposits
- Liquidity Ratio (LR) left unchanged at 30.0%.
- Asymmetric Corridor adjusted by +50/-450 basis points around the MPR.
More Insights
CBN Governor, Olayemi Cardoso, explained that the committee’s choice to hold the rate reflects its assessment that current monetary conditions are beginning to yield positive results. He noted the gradual moderation in headline inflation and improved FX market liquidity as indicators that the tightening measures are working.
Cardoso added that although inflationary pressures persist, maintaining the MPR at 27 percent provides necessary support for sustaining the downward movement in prices while anchoring expectations in the financial markets.
According to the CBN Governor, the decision received overwhelming support from the majority of MPC members.
Adjustments to Policy Parameters
At the meeting, the MPC reviewed other monetary tools and approved adjustments to strengthen policy transmission.
The standing facilities corridor (SFC) around the MPR was adjusted to +50/-450 basis points, narrowing the upper band while expanding the lower band to give the CBN greater flexibility in managing overnight lending and deposit activities.
The Committee also voted to retain the Cash Reserve Ratio (CRR) for commercial banks at 45 percent, while that of merchant banks was maintained at 16 percent, reaffirming the Bank’s commitment to managing system liquidity effectively.
Background: Earlier MPR Reduction
At its 302nd meeting in Abuja, the CBN had reduced the MPR by 50 basis points, lowering it from 27.5 percent to its current 27 percent.
The MPC also adjusted the asymmetric corridor at that time to +250/-250 basis points, narrowing it from the previous +500/-100 range.
These actions marked the early signs of a cautious shift as inflation indicators showed mild improvement.
The decision to maintain the MPR comes at a time when businesses are facing high borrowing costs, but the CBN insists that monetary discipline is necessary to restore macroeconomic stability.
The sustained tight stance is also expected to help contain speculative pressures in the FX market and support the naira’s resilience amid global and domestic headwinds.
What you should know
Newly released data from the National Bureau of Statistics (NBS) for October 2025 shows that Nigeria’s headline inflation eased to 16.05% in October 2025, down from 18.02% in September.
Month-on-month inflation rose to 0.93%, higher than 0.72% in September.
However, food inflation eased to 13.12% year-on-year from 39.16% in October 2024, a drop of 26.04 percentage points, following the change in the CPI base year.
Earlier, Nairametrics reported that the Naira recorded modest gains across the foreign exchange market on Monday, appreciating ahead of the highly anticipated 303rd Monetary Policy Committee (MPC) meeting of the CBN today.
With the next MPC meeting scheduled for February 2026, stakeholders will be watching closely to see whether inflation continues to ease sufficiently to warrant a shift towards a more accommodative monetary stance.
