The Central Bank of Nigeria’s Monetary Policy Committee has unanimously decided to maintain the Monetary Policy Rate at 27.5%.
This decision was announced by CBN Governor, Olayemi Cardoso during a press conference in Abuja on Thursday, following the committee’s 299th meeting.
Since May 2022, the CBN has implemented a series of 15 interest rate hikes to combat rising inflation.
This aggressive monetary tightening saw the MPR escalate from 11.5% in May 2022 to 27.5% by November 2024.
However, the latest decision to maintain the rate was influenced by recent economic indicators, including a decline in Nigeria’s inflation rate.
In addition to retaining the MPR, the MPC also upheld other key monetary policy parameters:
Cash Reserve Ratio: 50% for Deposit Money Banks and 16% for Merchant Banks.
Liquidity Ratio: 30%.
Asymmetric Corridor: +500/-100 basis points around the MPR.
The National Bureau of Statistics recently reported a significant decline in Nigeria’s inflation rate, from 34.8% in December 2024 to 24.48% in January 2025.
This sharp decrease is primarily attributed to a rebasing of the Consumer Price Index, updating the base year from 2009 to 2024 to better reflect current consumption patterns.
Cardoso stated that the Monetary Policy Committee unanimously decided to keep the Monetary Policy Rate at 27.5%, while maintaining the Cash Reserve Ratio at 50% for Deposit Money Banks and 16% for Merchant Banks. The Liquidity Ratio remains unchanged at 30%.
He expressed satisfaction with recent macroeconomic developments, including stability in the foreign exchange market and a gradual decline in inflation rates, which are expected to positively impact price stability in the near to medium term.
“These include the stability in the foreign exchange market with the resultant appreciation of the exchange rate and the gradual moderation in the price of PMS,” he said.
Despite these gains, Cardoso acknowledged that inflationary pressures remain, largely due to rising food prices.
“Members, however, were not oblivious to the risk of persisting inflationary pressures driven largely by food prices,” he said.
He further said that the committee took note of the revised CPI by the NBS, which adjusted the weights of items in the consumption basket to better reflect current consumption patterns.
“The committee further noted that as the federal government continues to improve security in food-producing communities, supported by other measures to enhance food supply, food prices are expected to continue to moderate,” Cardoso stated.
