CBN Policy Committee Keeps Benchmark Interest Rate at 27%
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) voted to keep the benchmark interest rate at 27% after the two-day meeting closed on Tuesday.
Against Broadstreet analysts’ expectations, the monetary authority brushed off disinflation as a key reason to axe the interest rate, keeping the private sector guessing about its dovish signal.
The authority cut the policy rate by 50 basis points in Oct after years of a hawkish pose. The committee vote to retain the Monetary Policy Rate at 27% and adjust the asymmetric corridor around the MPR to +50bps/-450bps compared with +250 bps/-250 bps in the Sept action.
The CBN committee also retains cash reserve ratios for Deposit Money Banks, Merchant Banks and non-Treasury Single Account (TSA) public sector deposits at 45.0%, 16.0% and 75.0%, respectively. It also retained liquidity rate at 30.0%. #CBN Policy Committee Keeps Benchmark Interest Rate at 27%
In a communiqué issued at the end of the meeting, CBN Governor Yemi Cardoso, said that members of the committee also voted to retain the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks and 16 per cent for merchant banks.
He said that all 12 members of the MPC attended the meeting. According to him, the committee’s decision is 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 developments and outlook to guide future policy decisions.
“It welcomed the continued deceleration in headline inflation year-on-year in October for the seventh consecutive month.
“This favourable development resulted from several factors, including sustained monetary policy tightening, stable exchange rate, increased capital flows, and surplus current account balance” he said.
The CBN governor said that the relative stability in the price of Premium Motor Spirit, (PMS), and improved food supply supported the pace of disinflation.
He, however, said that headline inflation remained high at double-digit, requiring sustained efforts towards moderating it further.
“The committee is, therefore, of the view that the steady deceleration in inflation across the three measures, headline, core, and food in October 2025 suggests that the large impact of previous tight policy measures is expected to continue in the near term.
“Maintaining the current stance of policy amid lingering global uncertainties would, thus, allow the effect of previous policy rate hikes to sufficiently transmit to the real economy and further reduce prices.
“Members noted the robust performance of the external sector, evidenced by the surplus current account balance and steady accretion to reserves, which have contributed to stability in the exchange rate and moderation in inflation,” he said.
