CBN retains interest rate at 27.50% to sustain disinflation momentum
CBN Building
Nike Popoola
The Central Bank of Nigeria (CBN), through its Monetary Policy Committee (MPC), has retained the Monetary Policy Rate (MPR) at 27.50 per cent, following the conclusion of its 301st meeting held on Monday, 21st and Tuesday, 22nd July 2025.
The Governor of the Central Bank, Mr. Olayemi Cardoso, stated that the decision reflects the Committee’s determination to consolidate the recent disinflationary trend and address persistent inflationary pressures in the Nigerian economy.
In addition to maintaining the MPR at 27.50 per cent, the MPC kept other key monetary parameters unchanged. The asymmetric corridor around the MPR remains at +500/-100 basis points. The Cash Reserve Ratio (CRR) stays at 50.00 per cent for Deposit Money Banks and 16.00 per cent for Merchant Banks, while the Liquidity Ratio remains at 30.00 per cent.
The Committee noted a third consecutive month of decline in headline inflation, which dropped to 22.22 per cent in June 2025 from 22.97 per cent in May. This moderation was largely driven by falling energy prices and continued stability in the foreign exchange market. However, members also observed a rise in month-on-month inflation, indicating persistent underlying pressures, particularly from services and imported food items.
The MPC commended the relative stability of the banking sector, underpinned by ongoing recapitalisation efforts. Eight banks have already met the new capital requirements, with others making progress. The Committee urged the CBN to maintain strong regulatory oversight to preserve financial system soundness.
On the economic front, Nigeria’s Gross Domestic Product (GDP) grew by 3.13 per cent in the first quarter of 2025, up from 2.27 per cent in the same period of 2024. The external reserves stood at US$40.11 billion as of July 18, 2025, providing about 9.5 months of import cover.
The MPC also lauded the Federal Government’s continued efforts to improve national security and support agricultural productivity. It called for sustained support to farmers, including timely provision of inputs such as high-yield seedlings and fertilizers.
Despite signs of improvement, the Committee stressed that inflation remains a significant risk. It therefore emphasized the need to maintain a tight monetary policy stance until inflationary pressures ease further. The CBN, it reaffirmed, remains committed to its core mandate of price stability and will take all necessary measures to promote economic confidence and resilience.
The next meeting of the Monetary Policy Committee is scheduled for Monday, 22nd and Tuesday, 23rd September 2025.
