CBN Retains Interest Rate at 27.5%: What It Means for Nigeria’s Economy

The Central Bank of Nigeria (CBN) has kept the Monetary Policy Rate (MPR) steady at 27.5 percent, marking the second time this year the rate has remained unchanged. CBN Governor Olayemi Cardoso announced the decision after the 300th Monetary Policy Committee (MPC) meeting in Abuja on May 19 and 20.

Retained at 27.5 percent to control inflation and stabilize the  Held at 50 percent for Deposit Money Banks and 16 percent for Merchant Banks
Remained at 30 percent
Maintained at +500/-100 basis points around the MPR

The MPC’s decision is based on recent macroeconomic developments, including .
– Relative stability in the foreign exchange market, leading to naira appreciation
– Gradual decline in Premium Motor Spirit (PMS) prices
– Moderation in food inflation, attributed to government measures to boost food supply and combat insecurity in farming communities

The CBN’s decision signals a cautious approach to monetary management, prioritizing price stability while supporting economic recovery. Experts predict that if inflation continues to moderate and the foreign exchange market stabilizes, the CBN may consider a more accommodative policy stance in the second half of the year .

The next MPC meeting is scheduled for July 21-22, 2025. With Nigeria’s foreign reserves rising to $38.90 billion in May, the CBN’s decision to retain the interest rate is seen as a strategic move to maintain economic stability .