The Central Bank of Nigeria (CBN) has decided to retain the monetary policy rate (MPR) at 27.50% in a bid to sustain the country’s economic growth and stability.
This decision was reached during the 299th meeting of the Monetary Policy Committee (MPC) held on February 19 and 20, 2025.
The MPC, comprising 12 members, unanimously agreed to hold all parameters constant, retaining the asymmetric corridor around the MPR at +500/-100 basis points.
Additionally, the Cash Reserve Ratio of Deposit Money Banks remains at 50.00%, while that of Merchant Banks stays at 16%. The Liquidity Ratio also remains unchanged at 30.00%.
The decision to retain the MPR at 27.50% is aimed at supporting the country’s economic growth, stabilizing prices, and ensuring financial system stability.
The MPC noted that recent macroeconomic developments, including stability in the foreign exchange market and moderation in the price of Premium Motor Spirit (PMS), are expected to positively impact price dynamics in the near to medium term.
However, the Committee acknowledged the risk of persisting inflationary pressures driven largely by food prices.
To address this, the MPC emphasized the importance of increased collaboration between the monetary and fiscal authorities to achieve price stability and sustainable growth.
The Committee also highlighted the benefits of improvements in the external sector, including the convergence of rates between the Nigeria Foreign Exchange Market (NFEM) and the Bureau de Change (BDC).
The MPC urged the Bank to continue boosting market liquidity and acknowledged recent measures introduced by the Bank to foster transparency, ethics, and credibility in the market.
In terms of economic performance, Nigeria’s headline inflation rate dropped to 24.48% year-on-year in January 2025, following the rebasing of the Consumer Price Index (CPI). Real GDP grew by 3.46% in the third quarter of 2024, driven by both the Oil and Non-oil sectors.
The external reserves remained robust at US$39.4 billion as of February 14, 2025, translating to an import cover of 9.6 months for goods and services.
The MPC emphasized the need to continue monitoring domestic and global developments to identify emerging risks and propose policy responses to mitigate their impact on the Nigerian economy.
The next meeting of the Committee is scheduled to hold on May 19 and 20, 2025.
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