CBN Retains Monetary Policy Rate at 27.50%

The Monetary Policy Committee (MPC) led by the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 27.50 per cent.

According to a release sign by the Governor of the CBN, Dr. Olayemi Cardoso, the decision was made at the Committee’s 300th meeting, held on May 19th and 20th, 2025.

Key decisions include:

– MPR retained at 27.50 per cent

– Asymmetric corridor around the MPR retained at +500/-100 basis points

– Cash Reserve Ratio (CRR) for Deposit Money Banks retained at 50.00 per cent and Merchant Banks at 16 per cent

– Liquidity Ratio retained at 30.00 per cent

The MPC highlighted relative improvements in key macroeconomic indicators, including a narrowing gap between the Nigeria Foreign Exchange Market (NFEM) and Bureau De Change (BDC) windows, a positive balance of payments position, and easing price of Premium Motor Spirit (PMS).

The Committee also commended the president Tinubu led government for implementing measures to increase food supply and step up the fight against insecurity.

However, the MPC acknowledged underlying inflationary pressures driven by high electricity prices, persistent foreign exchange demand pressure, and other structural factors.

The Committee urged the Bank to sustain the implementation of ongoing reforms to boost market confidence and called on the fiscal authority to strengthen efforts at enhancing foreign exchange earnings.

The Committee observed that headline inflation declined to 23.71 per cent in April 2025, compared with 24.23 per cent in March 2025.

Real GDP grew by 3.84 per cent in the fourth quarter of 2024, driven by both oil and non-oil sectors.

Gross external reserves increased to $38.90 billion as of May 16, 2025, representing an import cover of 7.6 months for goods and services.

The next meeting of the MPC is scheduled to hold on July 21st and 22nd, 2025.