David AkinmolaBy
The Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 27 per cent, keeping its tight monetary stance unchanged as the apex bank intensifies efforts to tame inflation and stabilise the foreign exchange market.
The decision was announced yesterday at the end of the 303rd Monetary Policy Committee (MPC) meeting in Abuja, where members voted overwhelmingly to leave all key monetary tools unchanged.
According to the CBN Governor, Olayemi Cardoso, the Committee opted to hold the benchmark interest rate after reviewing recent economic data, which showed “early but encouraging signs” that previous tightening measures are beginning to yield results. He cited the moderation in headline inflation and improved liquidity in the foreign exchange market as indicators that monetary conditions are gradually stabilising.
Policy tools unchanged
In its resolution, the MPC voted to retain the following policy parameters:
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MPR: 27.00%
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CRR: 45% for deposit money banks; 16% for merchant banks
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CRR on non-TSA public sector deposits: 75%
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Liquidity Ratio: 30%
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Asymmetric corridor around MPR: Adjusted to +50/-450 basis points
Cardoso said the adjustment to the standing facilities corridor would give the apex bank more flexibility in managing overnight lending and deposit activities, helping to strengthen liquidity control in the banking system.
Inflation moderates but pressures remain
The policy announcement comes as new data from the National Bureau of Statistics (NBS) shows headline inflation eased to 16.05 per cent in October 2025, from 18.02 per cent in September. Food inflation dropped sharply to 13.12 per cent year-on-year after the change in the Consumer Price Index (CPI) base year.
Despite the improvement, the MPC warned that inflationary pressures remain significant, driven by high energy costs, exchange rate pass-through, and supply chain challenges. Cardoso noted that the Committee prefers to “allow existing measures to continue their impact” before considering policy easing.
FX market stability improves
The CBN also highlighted improved liquidity and modest gains recorded by the naira across the foreign exchange market in recent sessions. Market analysts attribute the trend to sustained policy discipline, tighter market surveillance, and increased foreign investor interest ahead of the meeting.
Businesses groan under high rates
While the Committee defended its stance, manufacturers and service providers continue to raise concerns over high borrowing costs, which they say are constraining production and slowing economic recovery.
But Cardoso maintained that price stability remains the priority. “High interest rates are difficult for businesses, but a premature policy shift could undermine the progress already made,” he said.
Outlook
With the next MPC meeting scheduled for February 2026, analysts say sustained moderation in inflation and continued FX market stability will determine whether the CBN begins to consider a more accommodative stance later in the year.
For now, the apex bank insists that retaining the tight stance is necessary to anchor expectations, support currency stability and keep inflation on a downward path.
