The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has unanimously voted to retain the Monetary Policy Rate (MPR) at 27.5%, following its landmark 300th meeting held on May 19–20, 2025. All twelve members of the Committee were in attendance.
Announcing the decision, CBN Governor Olayemi Cardoso outlined the key policy outcomes as follows:
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Retention of the MPR at 27.5%
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Maintenance of the asymmetric corridor at +500/-100 basis points
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Retention of the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks
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Retention of the Liquidity Ratio at 30%
Economic Outlook and Policy Rationale
The MPC highlighted continued improvements in macroeconomic fundamentals, noting:
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A narrowing spread between the official and parallel foreign exchange markets
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A positive balance of payments
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A reduction in pump prices of petrol
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A sustained decline in food inflation
The Committee commended government interventions aimed at enhancing food supply and improving security in farming regions. Nonetheless, it recognized persistent inflationary pressures, attributed to elevated electricity tariffs, ongoing foreign exchange demand, and broader structural challenges.
According to the National Bureau of Statistics, headline inflation fell to 23.71% in April 2025, from 24.23% in March. Food inflation dropped to 21.26%, while core inflation moderated to 23.39%. Month-on-month inflation also showed a marked decline.
In terms of output, real GDP expanded by 3.84% year-on-year in Q4 2024, compared to 3.46% in the previous quarter. Growth was supported by both oil and non-oil sectors, with significant contributions from services.
External reserves rose to US$38.90 billion as of May 16, 2025, representing 7.6 months of import cover. The balance of payments recorded a US$1.10 billion surplus in Q4 2024.
Global Developments and Domestic Resilience
The Committee expressed concerns over the recent decline in crude oil prices, driven by increased output from non-OPEC producers and global trade policy uncertainties, particularly in the United States. It also noted the International Monetary Fund’s (IMF) downward revision of global growth forecasts to 2.8% in 2025, from 3.3% in 2024.
Despite external headwinds, the MPC reaffirmed the resilience of Nigeria’s banking system, citing improvements in sectoral performance indicators and ongoing progress in recapitalization efforts. The Committee called for continued regulatory vigilance to ensure compliance with prudential standards.
In view of prevailing uncertainties, the MPC opted to maintain its current policy stance to allow for clearer assessment of short-term economic trends. The Committee reiterated its commitment to managing inflation expectations and sustaining stability in the foreign exchange market.
The next MPC meeting is scheduled to hold on July 21–22, 2025.
