By Our Reporter
The Central Bank of Nigeria (CBN) has maintained the Monetary Policy Rate (MPR) at 27.50 percent in a move aimed at preserving macroeconomic stability amid signs of easing inflation. The decision came during the 300th meeting of the Monetary Policy Committee (MPC) held on May 19–20, 2025, where all twelve members unanimously voted to retain the current policy stance.
In addition to holding the MPR steady, the MPC also left other key monetary tools unchanged: the asymmetric corridor remains at +500/-100 basis points around the MPR, the Cash Reserve Ratio (CRR) stands at 50 percent for Deposit Money Banks and 16 percent for Merchant Banks, while the Liquidity Ratio is held at 30 percent. The Committee noted that these decisions are intended to consolidate recent economic gains and provide a stable platform for future policy adjustments.
Headline inflation moderated to 23.71 percent in April 2025, down from 24.23 percent in March, signaling a softening in price pressures. This decline was reflected across both food and core inflation metrics. The MPC credited the improvement to increased food supply and coordinated government efforts to boost agricultural productivity.
“We are beginning to see the effects of coordinated action in the agriculture sector and improved security,” said CBN Governor Olayemi Cardoso.
The MPC also observed a narrowing gap between the Nigeria Foreign Exchange Market (NFEM) and Bureau De Change (BDC) rates—an indicator of improving investor confidence. This, the Committee noted, is a direct outcome of ongoing foreign exchange reforms and urged the CBN to sustain its market stabilization efforts. Furthermore, the country’s gross external reserves rose by 2.85 percent to $38.90 billion as of May 16, 2025, representing 7.6 months of import cover.
Despite these positive developments, the MPC warned of underlying inflation risks driven by high electricity tariffs, persistent foreign exchange demand pressures, and deep-rooted structural inefficiencies. It urged the federal government to stay the course on fiscal reforms, particularly efforts to boost non-oil exports and diversify the foreign exchange base.
“The policy path remains cautious,” said one MPC member. “We need sustained reforms to translate current gains into long-term stability.”
The Committee also expressed concern over declining crude oil prices, citing increased supply from non-OPEC producers and global trade uncertainties, especially those related to U.S. policy shifts. These factors, it warned, could impact Nigeria’s fiscal outlook and budget performance going forward.
Nevertheless, the overall economic outlook remains cautiously optimistic. Real GDP grew by 3.84 percent in Q4 2024, up from 3.46 percent in the previous quarter. Both the oil and non-oil sectors contributed to this growth, with the services sector playing a particularly strong role in driving the recovery.
The MPC concluded the meeting with a renewed commitment to closely monitor domestic and global economic conditions. The next meeting is scheduled for July 21–22, 2025. In the interim, the Committee emphasized the importance of continued synergy between monetary and fiscal authorities to anchor inflation expectations and sustain economic stability.