The Central Bank of Nigeria (CBN) has once again retained the Monetary Policy Rate (MPR) at 27.50%, marking the second consecutive hold in 2025 following multiple rate hikes in 2024. The decision was made at the 300th Monetary Policy Committee (MPC) meeting held in Abuja, and announced by the CBN Governor, Olayemi Cardoso, on Tuesday.
Cardoso stated that the committee unanimously agreed to maintain the current rate to allow for better assessment of recent economic trends. He said, “The Committee was unanimous in its decision to hold policy and thus decided as follows: Retain the MPR at 27.50 per cent.”
In addition to maintaining the benchmark interest rate, the CBN also retained the following key indicators:
- Cash Reserve Ratio (CRR) for Deposit Money Banks: 50.00%
- CRR for Merchant Banks: 16.00%
- Liquidity Ratio: 30.00%
- Asymmetric Corridor: +500/-100 basis points around the MPR
- Inflation Sees Encouraging Drop
According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation rate fell to 23.71% in April 2025 from 24.23% in March. On a month-on-month basis, inflation significantly declined from 3.9% to 1.86%.
- Food inflation: Down to 21.26% from 21.79%
- Core inflation: Dropped to 23.39% from 24.43%
The MPC attributed these positive signs to ongoing reforms, improved food supply, and efforts to tackle insecurity in agricultural regions.
Forex Market and External Reserves Improve
The CBN also reviewed progress in the foreign exchange market, highlighting a 2.85% increase in Nigeria’s external reserves, now at $38.90 billion as of May 16, 2025. This marks a notable jump from $37.82 billion in March, providing 7.6 months of import cover.
Cardoso acknowledged the narrowing gap between the official exchange rate and the parallel market, calling it a sign of improved investor confidence. He urged continued reforms to boost foreign exchange earnings, especially from oil, gas, and non-oil exports.
GDP Growth and Oil Price Concerns
Nigeria’s real GDP recorded a growth of 3.84% in Q4 2024, up from 3.46% in Q3, driven by increased activity in both oil and non-oil sectors, particularly services. However, the MPC expressed concern about the recent decline in global crude oil prices, which could negatively impact government revenue and budget execution.
Banking Sector and Future Outlook
The MPC praised the ongoing stability in Nigeria’s banking sector, stressing the importance of effective regulatory oversight during the ongoing bank recapitalisation process.
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Cardoso reaffirmed the CBN’s commitment to curbing inflation and stabilizing the naira, adding that “members reaffirmed their commitment to prioritise policies targeted at anchoring inflation expectations and easing exchange rate pressure.”
The next MPC meeting is scheduled for July 21–22, 2025.
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