The Central Bank of Nigeria Keeps Monetary Policy Rate Unchanged at 27.50%
The Central Bank of Nigeria (CBN) has decided to keep the Monetary Policy Rate (MPR) at 27.50 percent, citing improvements in key economic indicators. CBN Governor Olayemi Cardoso announced the decision on Thursday during the 299th Monetary Policy Committee (MPC) meeting.
The move follows the National Bureau of Statistics (NBS) adjusting the way it measures inflation, which led to a revision in reported price increases. Under the new method, the overall inflation rate dropped from 34.80 percent in December 2024 to 24.48 percent in January 2025. Food inflation also saw a decline from 39.84 percent to 26.08 percent over the same period.
At the final MPC meeting of 2024, held in November, the committee raised the MPR slightly to 27.50 percent from 27.25 percent due to inflation concerns. Now, in its first meeting of 2025, the committee has voted to keep it unchanged.
Other monetary policy measures also remain the same, including the asymmetric corridor around the MPR at +500/-100 basis points, the cash reserve ratio at 50 percent for deposit banks and 16 percent for merchant banks, and the liquidity ratio at 30 percent.
Some financial analysts have questioned the impact of the CPI rebasing, arguing that it does not reflect an actual reduction in the cost of goods and services. They caution that a lower inflation rate on paper does not necessarily mean prices are dropping.
