The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has decided to maintain the Monetary Policy Rate (MPR) at 27.50%, marking its second consecutive hold in 2025. This decision was announced by CBN Governor Olayemi Cardoso during a press briefing in Abuja following the MPC’s 300th meeting.
The decision to pause on rates follows six consecutive increases in 2024. Cardoso stated, “The Committee was unanimous in its decision to hold policy, allowing members to better understand near-term developments in the economy.” Alongside the MPR, the CBN retained the asymmetric corridor at +500/-100 basis points, the Cash Reserve Ratio for Deposit Money Banks at 50.00%, and the Liquidity Ratio at 30.00%.
The MPC’s decision comes amid recent improvements in macroeconomic indicators. The National Bureau of Statistics reported a drop in headline inflation to 23.71% in April from 24.23% in March. Month-on-month inflation also significantly decreased from 3.9% to 1.86%. Food inflation fell to 21.26%, and core inflation eased to 23.39%.
Cardoso expressed cautious optimism regarding these developments, acknowledging the government’s efforts to improve food supply and address insecurity in farming communities. However, he also noted ongoing inflationary pressures driven by high electricity costs and persistent demand for foreign exchange.
The MPC welcomed reforms introduced by the Federal Government aimed at boosting local production and reducing forex demand. The Committee urged the apex bank to continue implementing reforms to enhance investor confidence in the foreign exchange market.
As of May 16, 2025, Nigeria’s gross external reserves increased by 2.85% to $38.90 billion, providing 7.6 months of import cover. Cardoso highlighted the narrowing gap between official and parallel forex market rates and called on fiscal authorities to intensify efforts to grow foreign exchange earnings.
While the MPC commended improvements in Nigeria’s real GDP, which grew by 3.84% in the fourth quarter of 2024, it expressed concerns about declining crude oil prices, which could threaten fiscal revenues. Cardoso pointed to challenges posed by increased production from non-OPEC members and uncertainties surrounding U.S. trade policy.
The next MPC meeting is scheduled for July 21 and 22, 2025, as the Committee continues to prioritize policies aimed at anchoring inflation expectations and easing exchange rate pressures.
