Central Bank of Nigeria Retains Benchmark Interest Rate at 27%

CBN Holds Policy Rate Steady Amid Economic Gains

The Central Bank of Nigeria's (CBN) Monetary Policy Committee (MPC) concluded its 303rd meeting on Tuesday, November 25, 2025, in Abuja, with a decision to retain the benchmark Monetary Policy Rate (MPR) at 27%. This move, announced by CBN Governor Olayemi Cardoso, signifies a continued cautious approach to monetary policy, aiming to solidify recent economic improvements and sustain a downward trend in inflation.

Key Decisions from the MPC Meeting

Governor Cardoso stated that the committee voted by a majority to maintain the current monetary policy stance. This decision follows a 50-basis-point reduction in the MPR in September 2025, which brought the rate to its current 27%. The MPC emphasized the need to allow the effects of previous policy adjustments to fully transmit through the economy.

In addition to the MPR, other key policy parameters were also retained:

• The Cash Reserve Ratio (CRR) for commercial banks remains at 45%, and for merchant banks at 16%.
• A CRR of 75% on non-Treasury Single Account (TSA) public sector deposits was also maintained.
• The Liquidity Ratio (LR) was kept unchanged at 30%.
• The asymmetric corridor around the MPR was adjusted to +50/-450 basis points.

Rationale and Economic Performance

The CBN's decision is underpinned by the objective of sustaining progress towards achieving low and stable inflation. The committee welcomed the continued deceleration in headline inflation, which marked its seventh consecutive monthly decline, easing to 16.05% in October 2025. This positive trend is attributed to sustained monetary policy tightening, a stable exchange rate, and improved capital flows.

Furthermore, the Nigerian economy demonstrated resilience, with the Gross Domestic Product (GDP) expanding by 4.23% in the second quarter of 2025, an increase from 3.13% in the first quarter. The Purchasing Managers' Index (PMI) also rose to 56.4 in November, indicating stronger non-oil activity and enhanced business confidence.

Broader Economic Landscape and Outlook

Governor Cardoso highlighted several other positive developments in the Nigerian economy. The foreign exchange market is reportedly operating with increased transparency, with daily turnover averaging approximately $500 million. The nation has also seen rising foreign reserves, bolstered by improved oil production, non-oil exports, and remittances.

The CBN also noted significant progress in the banking sector's recapitalization efforts, with 16 banks having already met the new minimum capital requirements, and 27 others actively working to raise capital. This strengthening of the financial system is expected to support Nigeria's long-term growth ambitions. The MPC reaffirmed its commitment to data-driven assessments to guide future policy decisions, emphasizing that a premature easing of monetary policy could reverse the gains made in price stability.