MPC Retains Interest Rate At 27.5%

The Central Bank of Nigeria’s Monetary Policy Committee has held all economic indicators from the first quarter, including the interest rate at 27.50 per cent.

The CBN Governor, Olayemi Cardoso, made the declaration during the committee’s meeting on May 19 and 20.

The committee, at its 299th meeting held on 19th and 20th February 2025, voted to retain the MPR at 27.50 per cent and retain the asymmetric corridor around the MPR at +500/-100 basis points.  It also preserved the Cash Reserve Ratio of Deposit Money Banks at 50.00 per cent and Merchant Banks at 16 per cent, while the Liquidity Ratio remained at 30.00 per cent.

While disclosing the decision of the MPC on Tuesday, Cardoso noted the National Bureau of Statistics (NBS) inflation rate for April, calculated at 23.71 per cent.

According to the NBS, the annual inflation rate declined to 23.71 per cent in April 2025 from 24.23% in the previous month.

Food inflation, the largest component of the inflation basket, remained elevated but decreased to 21.26 per cent from 21.79 per cent in March, mainly on account of prices of some goods such as maize, wheat, and yam.

The CBN governor stated that food inflation remained mild in April, praising the Federal Government for implementing efforts to enhance food availability and intensifying the battle against insecurity, particularly in farming communities.

“The MPC encourages security agencies to sustain the momentum while the government provides necessary protection to farmers to further boost local food production,” according to him.

The committee did, however, recognise underlying inflationary pressures caused by high electricity prices, ongoing foreign exchange demand pressure, and other historical structural reasons.

The MPC also underlined new federal government measures aimed at increasing domestic production, reducing foreign exchange demand pressure, and reducing the impact of increased interest rates on domestic pricing.

“Given the relative stability in the foreign exchange market, members urge the bank to sustain the implementation of the ongoing reforms to further boost the economy,” says Cardoso.