CBN retains interest rate at 27.50%
CBN Building
Nike Popoola
The Central Bank of Nigeria (CBN), on Thursday, decided to retain the Monetary Policy Rate (MPR) at 27.50 per cent, after its 299th Monetary Policy Committee, which commenced on Wednesday to Thursday, to review recent
economic and financial developments as well as assess the risks to the outlook
for 2025.
All 12 members of the Committee were in attendance in Abuja.
Announcing the committee’s decision, the Governor, CBN, Yemi Cardoso, said, “The Committee was unanimous in its decision to hold all parameters and thus
decided as follows: Retain the MPR at 27.50 per cent; Retain the asymmetric corridor around the MPR at +500/-100 basis points; Retain the Cash Reserve Ratio of Deposit Money Banks at 50.00 per cent and Merchant Banks at 16 per cent; Retain the Liquidity Ratio at 30.00 per cent.”
At the meeting, the MPC noted with satisfaction recent macroeconomic developments which are expected to positively impact price dynamics in the near to medium term.
These include the stability in the foreign exchange market with the resultant appreciation of the exchange rate and the Members reiterated the benefits of increased collaboration between the monetary and fiscal authorities, demonstrated at the recently concluded Monetary Policy Forum organized by the Bank.
The MPC thus urged the continued strengthening of this collaboration to achieve the mutually beneficial objectives of price stability and sustainable growth.
The Committee highlighted the benefits of the improvements in the external
sector to exchange rate stability, including the convergence of rates between
the Nigeria Foreign Exchange Market (NFEM) and the Bureau de Change
(BDC), and urged the Bank not to relent in its effort to boost market liquidity.
In this regard, the Committee acknowledged recent measures introduced by the
Bank, such as the Electronic Foreign Exchange Matching System (B-Match) and the Nigeria Foreign Exchange Code, to foster transparency, ethics and credibility in the market.
The MPC is, thus, of the view that following major policy measures undertaken by the monetary and fiscal authorities, the flow of foreign direct and portfolio investments as well as diaspora remittances are expected to increase as investor and stakeholder confidence improves.
