The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso has confirmed that the Monetary Policy Committee (MPC) has pegged the Monetary Policy Rate to 27.50%. The governor announced the development on Tuesday while speaking to the press in Abuja at the end of the MPC 300th meeting.
More so, the latest move represents the second consecutive time the MPC will opt against interest rate increase in 2025 after raising it six straight times in 2024. According to Cardoso, the move to keep the rate is an attempt to enable members of the committee to understand “near-term developments in the economy.”
Likewise, the CBN maintained the asymmetric corridor around the MPR at +500/-100 basis points, while keeping the Cash Reserve Ratio of Deposit Money Banks at 50.00%. Furthermore, the CRR for Merchant Banks remained at 16.00%, as the Liquidity Ratio stayed at 30.00%.
The governor of the CBN said the decision of the MPC is due to some advancement in macroeconomic indicators.
A recent revelation by the National Bureau of Statistics indicated that headline inflation dropped to 23.71% in April 2025 from 24.23% it recorded in March. Consequently, between that period, inflation dropped by 3.9% to 1.86% on a month-to-month stretch.
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Other noticeable improvements include food inflation which dipped to 21.28% from 21.79%, and core inflation fell to 23.39% from 24.43% between March and April.
CBN governor calls for caution
Despite recording noticeable progress in the fight against inflation, Olayemi Cardoso still emphasized the need for caution. He said, “The MPC noted the relative improvements in some key macroeconomic indicators which are expected to support the overall moderation in prices in the near to medium term.”
He swiftly pointed to the increasing inflationary pressures occasioned by the hike in electricity prices, growing demand for foreign exchange, and some core issues within the economy. The committee, according to the CBN governor, supports the key changes the Federal Government carried out to enhance local production and slash the demand for forex.
Cardoso said the reforms would support the fight against inflation. Also, he revealed the efforts of the Tinubu administration to boost food supply and combat insecurity in farming communities.
Similarly, the committee revisited developments in the foreign exchange market while supporting the CBN to continue its revolutionary boost to investors’ confidence. Olayemi Cardoso also discussed how the gross external reserves of Nigeria rallied by 2.85% to $38.90 billion as of May 16 2025 despite recording $37.82 billion at the end of March.
However, the committee mentioned that there is a good headway in the real GDP of Nigeria which went up by 3.84% in the last quarter of 2024. The committee added that the development emanated from both oil and non-oil sectors.
Still, the CBN governor warned that the declining crude oil prices could affect fiscal revenues. The next MPC meeting will be held on July 21 and 22 2025.
