CBN Maintains MPR at 27.5%
Read Time:1 Minute, 40 Second
The Central Bank of Nigeria’s Monetary Policy Committee (MPC) has voted unanimously to retain the Monetary Policy Rate (MPR) at 27.5%, maintaining its current tight stance on monetary policy.
The decision was announced following the Committee’s latest meeting, which concluded on May 21, 2025.
In addition to holding the MPR steady, the MPC also retained the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks. The Liquidity Ratio (LR) remains at 30%, while the asymmetric corridor around the MPR is unchanged at +500/-100 basis points.
According to the MPC, the decision to hold all policy parameters was informed by recent improvements in macroeconomic indicators.
This included a narrowing spread between the Nigeria Foreign Exchange Market (NFEM) and Bureau De Change (BDC) windows, a positive balance of payments position, and declining petrol (PMS) prices.
Read: CBN Warns Banks and Fintechs: Strengthen Sanctions Compliance or Face Penalties
The Committee also cited the moderation in food inflation, attributing it to government efforts in increasing food supply and enhancing security in farming regions. However, the Committee acknowledged that inflationary pressures persist, driven by high electricity tariffs, continued foreign exchange demand pressure, and structural bottlenecks.
It noted recent federal government policies aimed at supporting domestic production, reducing foreign currency dependence, and mitigating the impact of external price movements on local inflation.
On the banking sector, the MPC observed stability in key indicators and progress in the ongoing recapitalisation exercise, urging the Central Bank to continue strict regulatory oversight to ensure sector compliance with macroprudential standards.
In maintaining the current policy stance, the MPC highlighted the need for a clearer view of evolving domestic and global conditions.
Members expressed commitment to using monetary tools to manage inflation expectations and reduce pressure on the naira exchange rate. The next MPC meeting is scheduled for July 21 and 22, 2025.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.
Happy
0 %
Sad
0 %
Excited
0 %
Sleepy
0 %
Angry
0 %
Surprise
0 %
0
0
Average Rating