Abuja — The Central Bank of Nigeria’s Monetary Policy Committee held the Monetary Policy Rate at 27.5% during its 299th and 301st meetings in 2025, officials said Tuesday. Governor Olayemi Cardoso said the unanimous decision aimed to sustain tight monetary conditions amid ongoing economic challenges, with plans for tighter foreign exchange controls also announced.
The MPC also retained the asymmetric corridor at plus 500 basis points and minus 100 basis points around the MPR, keeping the Standing Lending Facility rate at 32.5% and the Standing Deposit Facility rate at 26.5%, according to official Central Bank of Nigeria records. The Cash Reserve Ratio for Deposit Money Banks remained at 50%, while the CRR for Merchant Banks was held at 16%, both unchanged from previous settings. The liquidity ratio requirement also stayed at 30%, maintaining strict limits on banks’ liquid assets relative to liabilities.
The decision to maintain the Monetary Policy Rate at 27.5% was unanimous among all members of the Monetary Policy Committee, Governor Olayemi Cardoso said during a post-meeting press briefing in Abuja.
Cardoso explained the committee’s rationale for holding rates was to sustain tight monetary conditions amid persistent inflationary pressures and economic uncertainties. He noted that headline inflation had declined to approximately 22.22% year-on-year in June 2025, down from 22.97% in May, largely due to moderating energy prices such as cooking gas, wood, charcoal, and diesel, according to data cited by the MPC. However, food inflation and core inflation remained elevated at roughly 21.97% and 22.76%, respectively, reflecting ongoing price pressures in processed food, housing, utilities, and services. The governor emphasized that maintaining the MPR at 27.5% was necessary to consolidate disinflation gains and support the Central Bank’s mandate to achieve price stability.
The MPC’s decision followed a series of rate hikes during 2024 and early 2025, with the MPR having risen from 22.75% to 24.75%, and then to 27.5% in March 2025. The current hold marks the second or third consecutive time the committee has maintained the rate at this level, signaling a cautious approach as the bank assesses the impact of earlier tightening measures. Cardoso said the committee chose to hold policy “to enable a better understanding of near-term developments,” reflecting a wait-and-see stance amid ongoing economic challenges.
In addition to interest rate policy, Cardoso highlighted the importance of foreign exchange market stability in supporting the inflation outlook. He noted improvements in exchange rate conditions and oil prices, with the MPC communiqué citing “FX market stability” as a key factor. The Central Bank’s gross external reserves stood at about US$40.11 billion, equivalent to roughly 9.5 months of import cover, strengthening the bank’s capacity to intervene in the foreign exchange market, officials said. Cardoso pledged tighter foreign exchange controls and more rigorous supervision of FX operations to curb speculative demand and ensure that allocations reflected genuine, documented transactions. He stressed that sustained exchange rate stability was critical to the success of the current tight monetary policy.
The committee also maintained the highly restrictive Cash Reserve Ratio at 50% for Deposit Money Banks, a level designed to withdraw significant liquidity from the banking system. The CRR for Merchant Banks remained at 16%, higher than pre-tightening norms but lower than for commercial banks. The liquidity ratio requirement of 30% compels banks to hold a substantial portion of their liabilities in liquid assets such as cash and eligible securities, further constraining excess lending capacity. Cardoso and the MPC described this combination as a deliberately tight overall monetary framework, not limited to the headline MPR.
Looking ahead, Cardoso indicated that monetary policy would remain tight “until risks to inflation recede sufficiently,” signaling a bias toward maintaining or cautiously easing from the current level. The MPC’s staff projections foresee further declines in inflation in coming months, contingent on sustained tight policy, stable foreign exchange conditions, and absence of major supply shocks. The committee warned that premature loosening of policy could reverse recent disinflation gains and destabilize the FX market. Cardoso also underscored the need to strengthen FX market regulation and enforcement as part of the Central Bank’s broader strategy to anchor inflation expectations.
The MPC’s next meeting was scheduled for Sept. 22 and 23, 2025, underscoring the bank’s commitment to regular, transparent policy reviews as it navigates high inflation, foreign exchange pressures, and economic growth concerns under Governor Cardoso’s leadership. Records show that the current policy stance follows a broad tightening cycle that began in 2024 and continued into 2025, with the Central Bank adjusting key monetary tools and banking-sector parameters to address Nigeria’s complex macroeconomic environment.
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