The Central Bank of Nigeria (CBN) has maintained its benchmark interest rate, the Monetary Policy Rate (MPR), at 27.5%, citing underlying pressure on prices of goods and services as well as continued global uncertainties.
The decision was made during the 101st Monetary Policy Committee (MPC) meeting in Abuja, chaired by CBN Governor, Mr. Olayemi Cardoso. The asymmetric corridor around the MPR was retained at +500/-100 basis points, while the Cash Reserve Ratio (CRR) for Deposit Money Banks remained at 50%, and for merchant banks at 16%. The Liquidity Ratio for all banks was also kept at 30%.
According to CBN Governor, the committee decided to maintain the current monetary policy stance to sustain the momentum of disinflation and sufficiently contain price pressures. The MPC noted a decline in headline inflation in June 2025 but also observed underlying price pressures.
Key Highlights:
- Foreign Reserves: The nation’s Foreign Reserves stood at $40.1 billion as of July 18, providing import cover for nine and a half months.
- Bank Recapitalization: Eight banks have met the new minimum capital requirements, while others are making progress towards meeting the deadline.
- Economic Growth: Real GDP in the first quarter of 2025 grew by 3.13%, compared to 2.27% and 3.38% in the corresponding and preceding quarters of 2024, respectively.
The CBN Governor emphasized that the committee would continue to assess economic conditions and price developments to inform future policy decisions. The government has been urged to support the timely provision of high-yielding seedlings, fertilizers, and other critical inputs for the current farming season.
Global Economic Outlook:
The CBN Governor noted that global output recovery continues at a gradual pace, but recent developments, especially the persistent tariff war and geopolitical tensions, may disrupt supply chains and exert upward pressure on the price of imports.
The CBN’s decision to hold the interest rate steady reflects its cautious approach to managing inflation and maintaining economic stability in the face of global uncertainties.
