The Monetary Policy Committee of the Central Bank of Nigeria, Thursday retained the country’s benchmark interest rate at 27.50 per cent.
The decision was reached at its 299th meeting in Abuja.
The CBN Governor, Olayemi Cardoso, said that all parameters were unanimously held as the committee assessed the economic outlook for 2025.
“The Committee was unanimous in its decision to hold all parameters and thus decided as follows: 1. Retain the MPR at 27.50 per cent. 2. Retain the asymmetric corridor around the MPR at +500/-100 basis points.
“3. Retain the Cash Reserve Ratio of Deposit Money Banks at 50.00 per cent and Merchant Banks at 16 per cent. 4. Retain the Liquidity Ratio at 30.00 per cent,” Cardoso said.
The decision marks a pause in rate hikes after six consecutive increases in 2024, as the apex bank navigates inflationary pressures, exchange rate volatility, and economic growth concerns.
The Committee noted stability in the foreign exchange market, improvements in external reserves, and a gradual moderation in fuel prices as key macroeconomic developments influencing its decision
It acknowledged that inflation remains a concern, particularly as the recent rebasing of the Consumer Price Index by the National Bureau of Statistics revised headline inflation to 24.48 per cent in January 2025, compared to 34.80 per cent in December 2024 under the previous base year.
The MPC expressed confidence that as food security measures improve, inflationary pressures, particularly those driven by food prices, will ease over time.
Cardoso further highlighted the need for continued collaboration between monetary and fiscal authorities to sustain recent macroeconomic gains.
He stated that the CBN’s recent measures in the foreign exchange market, such as the Electronic Foreign Exchange Matching System and the Nigeria Foreign Exchange Code, have helped stabilise the exchange rate.
The committee observed a convergence between the Nigeria Foreign Exchange Market and Bureau de Change rates, improving market transparency and liquidity.
The committee noted a positive trend in oil production, which reached 1.54 million barrels per day in January 2025, as a key factor supporting external reserves, which stood at $39.4bn as of February 14, 2025, translating to an import cover of 9.6 months.
It also noted that Nigeria’s GDP grew by 3.46 per cent in the third quarter of 2024, driven primarily by the non-oil sector, with the services industry playing a dominant role.
Cardoso reassured that the banking sector remains robust and resilient despite ongoing macroeconomic challenges.
However, he stressed the importance of strengthening banking system surveillance, particularly in light of the ongoing recapitalisation drive for deposit money banks.
He stated that the CBN would ensure the injection of quality capital into the banking system to safeguard financial stability amid both domestic and global uncertainties.
The committee identified geopolitical risks, including the Russia-Ukraine conflict and tensions in the Middle East, as factors that could influence Nigeria’s economic stability.
It also expressed concerns over the United States government’s increased tariffs on trade partners, which could impact global inflation and economic growth.
The MPC reaffirmed its commitment to monitoring domestic and global economic developments, with the next policy meeting scheduled for May 19 and 20, 2025.
The decision to retain the monetary parameters comes after the National Bureau of Statistics recently disclosed that Nigeria’s headline inflation rate stood at 24.48 per cent in January 2025.
This figure, however, reflects a recalculated Consumer Price Index following the rebasing of inflation metrics.
Under the previous methodology, the inflation rate was reported at 34.80 per cent in December 2024.
With inflation appearing to have moderated under the rebased CPI, there were calls from economic analysts and business groups to pause further rate increases.
The Centre for the Promotion of Private Enterprise earlier urged the CBN to halt further monetary tightening, arguing that fiscal policy interventions should now take precedence in addressing inflationary pressures.
The Chief Executive Officer of CPPE, Dr Muda Yusuf, stressed that increasing interest rates further could stifle economic growth at a time when businesses need access to affordable credit.
