CBN keeps MPR at 27% to rein in inflation, exchange rate  

Central Bank of Nigeria Monetary Policy Committee has retained the Monetary Policy Rate at 27 per cent, maintaining its tight monetary policy as part of ongoing efforts to rein in inflation and stabilise the foreign exchange market but it lowered a deposit rate in a sign of confidence in the economic outlook. Inflation slowed for the seventh month in a row in October to 16.05% year on year But central bank Governor Olayemi Cardoso said inflation was still too high, and the MPR was maintained at 27%. “Headline inflation remains high at double digits, requiring sustained efforts towards moderating it further,” Cardoso told a press conference. “The decision was underpinned by the need to sustain the progress made so far towards achieving low and stable inflation.” Cardoso said the bank was adjusting the corridor on its Standing Facility to +50 to -450 basis points around the MPR, cutting its deposit rate and encouraging banks to lend rather than parking money with the central bank.

Razia Khan, head of Africa research at Standard Chartered, said the changes to the standing facility were the real talking point. “It is a very significant de facto easing, signalling confidence in both the inflation trajectory and FX stability.” Another reason why the central bank held off from cutting its key rate could be that it wants to monitor whether inflation rises before its next policy meeting, analysts said. “If they cut rates now, January could reveal that it did not make sense. They moved the next meeting to February, which means that they would be using January inflation,” said Tajudeen Ibrahim, director of research at investment firm Cardoso previously said the central bank is gunning for inflation to fall to single digits in the next few years. Inflation hit repeated 28-year highs last year, spurred by President Bola Tinubu’s moves to devalue the naira currency and remove energy subsidies after taking office in 2023.

The decision was announced at the end of the Monetary Policy Committee meeting held in Abuja, where members voted to keep key policy parameters unchanged. The MPR, which serves as the benchmark interest rate for the economy, has remained elevated as the CBN continues its aggressive measures to curb rising prices and restore investor confidence. Key outcomes of the 303rd CBN MPC meeting are Monetary Policy Rate (MPR) retained at 27.00%; Cash Reserve Ratio retained at 45.00% for DMBs, and retained 16.00% for Merchant Banks, respectively; Retained 75% CRR on Non-TSA public sector deposits; Liquidity Ratio (LR) left unchanged at 30.0%; Asymmetric Corridor adjusted by +50/-450 basis points around the MPR.

The standing facilities corridor (SFC) around the MPR was adjusted to +50/-450 basis points, narrowing the upper band while expanding the lower band to give the CBN greater flexibility in managing overnight lending and deposit activities. The Committee also voted to retain the Cash Reserve Ratio (CRR) for commercial banks at 45 percent, while that of merchant banks was maintained at 16 percent, reaffirming the Bank’s commitment to managing system liquidity effectively. The decision to maintain the MPR comes at a time when businesses are facing high borrowing costs, but the CBN insists that monetary discipline is necessary to restore macroeconomic stability. The sustained tight stance is also expected to help contain speculative pressures in the FX market and support the naira’s resilience amid global and domestic headwinds.

National Bureau of Statistics (NBS) said for October 2025 Nigeria’s headline inflation eased to 16.05 per cent down from 18.02 in September. Month-on-month inflation rose to 0.93%, higher than 0.72% in September. However, food inflation eased to 13.12% year-on-year from 39.16% in October 2024, a drop of 26.04 percentage points, following the change in the CPI base year.