In a significant shift from its recent trend of interest rate hikes, the Central Bank of Nigeria (CBN) has opted to maintain the Monetary Policy Rate (MPR) at 27.5 per cent. This decision was announced by CBN Governor Yemi Cardoso following the 300th meeting of the Monetary Policy Committee (MPC), held on Tuesday in Abuja.
Governor Cardoso revealed that all 12 committee members unanimously voted to keep all key monetary tools unchanged. Specifically, the Cash Reserve Ratio (CRR) remains fixed at 50 per cent for Deposit Money Banks and 16 per cent for Merchant Banks.
Additionally, the Liquidity Ratio has been retained at 30 per cent, while the asymmetric corridor around the MPR remains at +500/-100 basis points.
This is the first instance since February 2024 that the MPC has decided not to raise interest rates. Between February and May, the committee had raised the MPR from 18.5 per cent to 27.5 per cent in a bid to curb inflation and stabilise the naira.
By holding steady this time, the apex bank appears to be assessing the impact of its earlier tightening measures, while continuing to monitor domestic and global economic conditions.
Governor Cardoso underscored that the current stance provides space to evaluate the efficacy of prior rate adjustments, particularly in the context of exchange rate fluctuations, inflationary pressures, and economic growth trends.
The decision comes amid ongoing efforts by the CBN to stabilise the financial system, foster investor confidence, and stimulate real sector lending.
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