The Monetary Policy Committee (MPC) of the Central Bank of Nigeria, (CBN), has retained the Monetary Policy Rate at 27.5%, marking its second consecutive hold in 2025.
This decision was announced by the CBN governor, Olayemi Cardoso, during a press briefing yesterday in Abuja, following the conclusion of the MPC’s 300th meeting.
This second pause in rates comes after six consecutive hikes recorded in 2024.
Cardoso said, “The Committee was unanimous in its decision to hold policy and thus decided as follows: Retain the MPR at 27.50 percent”, adding that the pause would enable members to better understand near-term developments in the economy.
With this move, the CBN retained the asymmetric corridor around the MPR at +500/-100 basis points, the Cash Reserve Ratio (CRR) of Deposit Money Banks at 50.00 percent, and that of Merchant Banks at 16.00 percent, while keeping the Liquidity Ratio unchanged at 30.00 percent.
According to the MPC, it based its decision on recent improvements in macroeconomic indicators.
Recall that a recent report by the National Bureau of Statistics (NBS), headline inflation dropped to 23.71% in April 2025, from 24.23% in March. Food inflation fell to 21.26% from 21.79%, while core inflation eased to 23.39 per cent in April from 24.43% in March.
The Committee noted these developments with cautious optimism. He also acknowledged the efforts of the government in improving food supply and tackling insecurity in farming communities.
Despite these gains, the CBN expressed concern about lingering inflationary pressures driven by high electricity costs, persistent demand for foreign exchange, and structural issues within the economy.
The Committee welcomed reforms introduced by the Federal Government aimed at boosting local production and reducing demand for forex, noting that such moves would help dampen inflationary pass-through.
The MPC also reviewed developments in the foreign exchange market, and urged the apex bank to continue implementing reforms to enhance investor confidence.
The governor noted that Nigeria’s gross external reserves increased by 2.85% to $38.90bn as of May 16, 2025, when compared to $37.82bn at the end of March, representing 7.6 months of import cover.
Cardoso said the Committee was encouraged by the progressive narrowing of the gap between the official and parallel forex market rates and urged the fiscal authorities to intensify efforts to grow FX earnings, particularly from oil, gas and non-oil exports.
The Committee further acknowledged the improvement in Nigeria’s real GDP, which grew by 3.84% in the fourth quarter of 2024, up from 3.46% in the previous quarter, driven by both oil and non-oil sectors, especially services. However, Cardoso noted concerns about declining crude oil prices, which could threaten fiscal revenues.
The MPC commended the relative stability in the banking sector and called on the apex bank to sustain effective oversight amid the ongoing recapitalisation exercise.
The next MPC meeting is scheduled for July 21 and 22, 2025.
