The Monetary Policy Committee of the Central Bank of Nigeria has retained the Monetary Policy Rate at 27.50% for the second time in 2025.
This decision was disclosed by CBN Governor Olayemi Cardoso during a press briefing on Tuesday following the 300th MPC meeting held in Abuja.
Cardoso said, “The Committee was unanimous in its decision to hold policy and thus decided as follows: Retain the MPR at 27.50 per cent,” adding that the pause would enable members to better understand near-term developments in the economy.
The MPC also retained the asymmetric corridor around the MPR at +500/-100 basis points, the Cash Reserve Ratio at 50% for Deposit Money Banks and 16% for Merchant Banks, and the Liquidity Ratio at 30%.
This steady policy stance reflects growing confidence in Nigeria’s improving economic indicators.
According to the National Bureau of Statistics, headline inflation fell to 23.71% in April 2025 from 24.23% in March.
Month-on-month inflation saw a sharp decline from 3.9% to 1.86%, while food inflation eased to 21.26% from 21.79%, and core inflation dropped to 23.39% from 24.43%.
The MPC noted the relative improvements in some key macroeconomic indicators which are expected to support the overall moderation in prices in the near to medium term,” Cardoso said.
He also recognized the government’s efforts to enhance food production and address insecurity in farming areas.
Although progress has been made, the CBN remains concerned about ongoing inflationary pressures fueled by elevated electricity costs, sustained foreign exchange demand, and structural economic challenges.
The Committee praised the Federal Government’s reforms to increase local production and reduce forex demand, noting their potential to mitigate inflationary effects.
The MPC also assessed foreign exchange market trends and encouraged the apex bank to persist with reforms to bolster investor confidence.
The governor announced that Nigeria’s gross external reserves rose by 2.85% to $38.90 billion as of May 16, 2025, from $37.82 billion at March’s end, providing 7.6 months of import cover.
Cardoso highlighted the Committee’s optimism about the narrowing gap between official and parallel forex market rates, urging fiscal authorities to boost FX earnings, particularly from oil, gas, and non-oil exports.
The Committee also noted Nigeria’s real GDP growth, which increased to 3.84% in Q4 2024 from 3.46% in the prior quarter, driven by both oil and non-oil sectors, particularly services.
However, Cardoso noted concerns about declining crude oil prices, which could threaten fiscal revenues.
“The Committee expressed concerns about the recent decline in crude oil prices, attributable to increased production by non-OPEC members as well as uncertainties associated with U.S. trade policy, which present new challenges for fiscal receipts and budget implementation,” he said.
The MPC praised the relative stability of the banking sector and urged the CBN to ensure continued strong regulatory oversight, particularly throughout the ongoing recapitalisation process.
“Members reaffirmed their commitment to prioritise policies targeted at anchoring inflation expectations and easing exchange rate pressure,” the governor said.
The next MPC meeting is scheduled for July 21 and 22, 2025.
