CBN retains interest rate at 27.5% amid global headwinds

The Central Bank of Nigeria (CBN) has announced the retention of the Monetary Policy Rate (MPR) at 27.5 per cent, following the conclusion of its 301st Monetary Policy Committee (MPC) meeting held on Tuesday, July 22, 2025.

Briefing journalists after the meeting, CBN Governor Dr. Olayemi Cardoso said the decision to hold the rate steady was guided by the need to sustain the disinflationary momentum and contain persistent price pressures.

“The decision was premised on the need to sustain disinflation and sufficiently contain price pressure,” Cardoso stated, noting that the committee was cautiously optimistic about recent economic indicators.

The MPR, which serves as the benchmark interest rate, remains a critical instrument in the apex bank’s efforts to moderate inflation, which, though slowing in recent months, still exceeds the CBN’s comfort zone.

All 12 MPC members voted unanimously to maintain the current rate, reflecting a unified approach among policymakers.

Key Resolutions from the MPC Meeting: Monetary Policy Rate (MPR): Retained at 27.5 per cent; Asymmetric Corridor: Maintained at +500/-100 basis points; Cash Reserve Ratio (CRR): Held at 50 per cent for Deposit Money Banks and 16% for Merchant Banks; Liquidity Ratio: Kept steady at 30 per cent.

Cardoso emphasized that the decision reflects the CBN’s commitment to striking a balance between controlling inflation and supporting economic growth.

“Maintaining the current policy stance will continue to address existing and emerging inflationary pressure. The MPC will continue to undertake rigorous assessment of economic conditions, price developments, and outlook to inform future policy decisions,” he said.

Before the meeting, analysts were divided on the likely outcome. While some expected a slight hike in interest rates to bolster the naira amid exchange rate volatility, others advocated for a hold decision due to sluggish economic growth and the potential impact of tighter monetary policy on businesses and consumers.

The CBN’s decision to maintain the current stance signals a preference for policy continuity and cautious calibration, as Nigeria navigates a complex macroeconomic environment marked by inflation, foreign exchange instability, and low consumer confidence.