The Central Bank of Nigeria (CBN) has once again retained the Monetary Policy Rate (MPR) at 27.50%, marking the second consecutive time the rate has been held steady in 2025. The decision was announced by CBN Governor Olayemi Cardoso during a press briefing in Abuja on Tuesday, following the 300th meeting of the bank’s Monetary Policy Committee (MPC).
This pause follows a series of six rate hikes in 2024, as the apex bank intensified efforts to combat inflation and stabilize the economy.
Cardoso said the committee was unanimous in its decision to maintain the current rate, noting that the pause would allow members to better assess short-term economic developments. Other key monetary parameters were also left unchanged: the asymmetric corridor around the MPR at +500/-100 basis points, the Cash Reserve Ratio for Deposit Money Banks at 50.00%, for Merchant Banks at 16.00%, and the Liquidity Ratio at 30.00%.
The decision was influenced by improvements in macroeconomic indicators. Data from the National Bureau of Statistics showed headline inflation dropped to 23.71% in April 2025 from 24.23% in March. Month-on-month inflation also declined sharply to 1.86% from 3.9%. Food inflation eased to 21.26%, while core inflation dropped to 23.39% from 24.43%.
Cardoso expressed cautious optimism, citing government efforts to boost food supply and address insecurity in agricultural areas. However, the MPC raised concerns over persistent inflationary pressures stemming from high electricity costs, strong foreign exchange demand, and structural economic challenges.
The committee welcomed ongoing government reforms aimed at increasing domestic production and reducing forex dependency. It also encouraged continued CBN efforts to strengthen investor confidence in the foreign exchange market.
Nigeria’s external reserves rose by 2.85% to $38.90 billion as of May 16, 2025, up from $37.82 billion at the end of March, providing 7.6 months of import cover. The CBN governor also noted a narrowing gap between official and parallel market forex rates and called on fiscal authorities to ramp up foreign exchange earnings, particularly from oil and non-oil exports.
In terms of growth, Nigeria’s real GDP rose to 3.84% in Q4 2024, up from 3.46% in the previous quarter, driven largely by services and growth in both oil and non-oil sectors.
However, Cardoso flagged the recent decline in global crude oil prices—caused by increased output from non-OPEC countries and uncertainties surrounding U.S. trade policy—as a potential threat to government revenue and budget execution.
The MPC also praised the relative stability in the banking sector and emphasized the need for continued strong regulatory oversight amid ongoing recapitalisation efforts.
“The Committee reaffirmed its commitment to policies aimed at anchoring inflation expectations and easing exchange rate pressures,” Cardoso concluded.
The next MPC meeting is scheduled for July 21–22, 2025.
