Committee prioritizes inflation control and FX stability amid easing price pressures
The Central Bank of Nigeria (CBN) has decided to maintain the Monetary Policy Rate (MPR) at 27 percent, extending its pause on monetary easing. The announcement was made by CBN Governor Olayemi Cardoso at the conclusion of the Bank’s 303rd Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.
Governor Cardoso explained that the decision, supported by a majority of committee members, reflects the Bank’s assessment that current monetary conditions are gradually yielding positive results, particularly in moderating inflation and improving foreign exchange market liquidity.
“The Committee decided to maintain the monetary policy stance,” Cardoso said, noting that while inflationary pressures persist, keeping the MPR at 27 percent provides the necessary support to sustain price stability and anchor market expectations.
Other Policy Measures Retained
Alongside the MPR, the MPC retained several key parameters to continue managing system liquidity effectively:
- Cash Reserve Ratio (CRR): 45% for commercial banks, 16% for merchant banks, and 75% on Non-TSA public sector deposits.
- Liquidity Ratio (LR): Maintained at 30%.
- Asymmetric Corridor: Adjusted to +50/-450 basis points around the MPR to enhance overnight liquidity management.
The committee also reaffirmed its commitment to a tight monetary stance, emphasizing the need for continued coordination to bring inflation down further. It highlighted progress in bank recapitalisation, with 16 banks meeting regulatory requirements, and acknowledged global economic challenges, including trade tensions, that may impact growth.
Context and Background
The current decision follows a 50-basis-point cut in September 2025, the first rate reduction since the tightening cycle began under the current CBN leadership. That move lowered the MPR from 27.5% to 27% and narrowed the asymmetric corridor from +500/-100 to +250/-250 basis points, signaling cautious optimism about inflation trends.
Despite easing headline inflation, which fell to 16.05% in October 2025 from 18.02% in September, borrowing costs remain high for businesses. The CBN maintains that sustained monetary discipline is essential to support macroeconomic stability, contain speculative pressures in the FX market, and reinforce the naira’s resilience.
The next MPC meeting is scheduled for February 2026, and analysts will be closely monitoring inflation trends and economic conditions to determine whether a shift toward a more accommodative policy stance is warranted.
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