CBN Retains Benchmark Interest Rate at 27.50% in 300th MPC Meeting

The Central Bank of Nigeria’s Monetary Policy Committee (MPC) has retained the benchmark interest rate at 27.50% for the second consecutive time in 2025, citing the need to sustain recent gains in macroeconomic stability and inflation moderation.

CBN Governor, Olayemi Cardoso, made the announcement on Tuesday during a press briefing in Abuja following the conclusion of the Committee’s landmark 300th meeting.

“The Committee was unanimous in its agreement to hold all parameters,” Cardoso stated, confirming that the MPC resolved to maintain the current monetary policy stance amid ongoing evaluations of domestic and global economic indicators.

The decision comes against the backdrop of a challenging macroeconomic environment characterized by high inflation, exchange rate volatility and external sector pressures.

Analysts had widely anticipated a hold position, given recent signals from the apex bank indicating cautious optimism in the fight against inflation.

The retention of the Monetary Policy Rate (MPR) at 27.50% reflects the CBN’s commitment to a tight policy stance, aimed at consolidating monetary tightening measures implemented in previous quarters.

In addition to holding the benchmark rate, the MPC also left other key policy instruments unchanged: the Cash Reserve Ratio (CRR) at 45% for Deposit Money Banks (DMBs), 14% for Merchant Banks and the Liquidity Ratio at 30%.

The central bank’s decision aligns with current inflation trends, which although remain elevated, have shown early signs of deceleration. Market analysts note that any premature easing could reverse the fragile gains recorded in recent months.

Cardoso emphasized the MPC’s focus on achieving price stability, restoring investor confidence, and maintaining a stable financial system.

He noted that while some emerging market economies have started considering rate cuts, Nigeria’s domestic environment still necessitates vigilance.

Tuesday’s announcement follows a wave of macroeconomic reforms introduced under President Bola Tinubu’s administration, including the harmonization of the foreign exchange market, removal of petrol subsidies and fiscal consolidation efforts.

These policies have reshaped the operating environment for monetary policy, prompting the apex bank to maintain a cautious policy trajectory.

The MPC is expected to continue monitoring economic developments, particularly in relation to inflationary pressures, currency performance, capital flows, and external risks, as it formulates subsequent policy actions.

Investors and market participants will closely assess the implications of the MPC’s decision on fixed-income yields, credit market activity, and broader macroeconomic indicators.

The retention of the benchmark rate is seen as a signal of policy consistency and a deliberate effort to stabilize economic fundamentals while maintaining the credibility of the central bank’s inflation-targeting framework.