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Nigeria’s central bank on Tuesday kept its benchmark interest rate unchanged at 27 per cent, maintaining its policy stance as inflation continues to slow and economic conditions stabilise.
Governor Olayemi Cardoso announced the decision at the end of the bank’s two-day monetary policy meeting in Abuja.
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He said the committee’s decision was underpinned by the need to sustain the progress made so far towards achieving low and stable inflation.
The MPC reaffirmed its commitment to a data driven assessment of development and outlook to guide future policy decisions considerations.
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The decision comes after the CBN made its first interest rate cut in four years at the previous meeting, drawing a close to a long period of aggressive tightening.
At that earlier meeting, the MPC reduced the Monetary Policy Rate by 50 basis points to 27 per cent, the first cut since 2020, as inflation began to ease after months of severe price pressures.
The committee adjusted the asymmetric corridor around the MPR at +50/-450 basis points, a move aimed at discouraging banks from keeping idle funds with the CBN and encouraging more lending into the economy.
It retained the Cash Reserve Ratio (CRR) for commercial banks at 45 per cent and retained merchant banks at 16 per cent. The liquidity ratio was also kept at 30 per cent.
The committee also left the CRR on non TSA public sector deposits for enhanced liquidity management considerations at 75 percent.
The slowdown followed a revision of the consumer price index by the National Bureau of Statistics, which updated its base year and adjusted item weights to better reflect household spending.
Inflation, which reached repeated 28-year highs in 2023 after fuel subsidy removal and a sharp naira devaluation, has eased for several months. Headline inflation slowed to 16.05 per cent in October from 18.02 per cent in September, according to the latest figures.
“The committee welcomed the continued deceleration in headline inflation year on year in October, 2025 for the seventh consecutive month, this favorable development resulted from several factors, including sustained monetary policy tightening, stable exchange rate, increased capital flows and surplus current account balance,” he said.
He added that relative stability in petrol (PMS) prices and improved food supply helped ease inflation. However, headline inflation remains in double digits, requiring ongoing efforts to bring it down.
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The committee noted that the steady slowdown in overall and food inflation in October 2025 suggests that the effects of previous policy measures, including tax changes, will continue to play out.
Maintaining the current policy stance amid global uncertainties will allow the impact of earlier rate hikes to fully reach the real economy and further moderate prices.”
“Members noted that the robust performance of the external sector, evidenced by the surplus current account balance and steady addition to reserves which have contributed to stability in the exchange rate and moderation in inflation,” he said.
The MPC also commended the collaborative effort of both the fiscal and monetary authorities, which led to the recent upright of Nigeria’s sovereign credit rating by major credit rating agencies and the delisting of the country from the FATF grade list.
According to him, members acknowledge that these positive developments would further boost investor confidence and improve capital flows to the economy.
The committee noted with satisfaction the sustained resilience of the banking system with most financial soundness indicators remaining within regulatory thresholds.
Members also acknowledge the substantial progress in the ongoing recapitalisation programme, with 16 banks achieving full compliance with the revised capital requirements.
The committee thus urged the bank to ensure a successful implementation and conclusion of the programme.
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