CBN Holds Monetary Policy Rate at 27.5% for First Time

The Central Bank of Nigeria (CBN) has decided to maintain the Monetary Policy Rate (MPR) at 27.5% for the first time since February 2024, signaling a pause in its aggressive rate-hiking cycle.

CBN Governor Yemi Cardoso announced the decision earlier today, May 20, 2025, during the 300th Monetary Policy Committee (MPC) meeting in Abuja.

Unanimous Decision to Hold Rates

Governor Cardoso revealed that all 12 MPC members voted unanimously to keep key monetary parameters unchanged.

The Cash Reserve Ratio (CRR) remains at 50% for Deposit Money Banks and 16% for Merchant Banks, while the Liquidity Ratio stays at 30%.

The Asymmetric Corridor around the MPR was also held steady at +500/-100 basis points.

This decision marks a shift from the CBN’s recent policy, which saw the MPR rise from 18.5% in February 2024 to 27.5% over several months.

The pause reflects the CBN’s cautious approach amid Nigeria’s economic challenges, including inflation and currency pressures.

Context and Economic Implications

Since February 2024, the MPC, under Cardoso’s leadership, has pursued a tight monetary policy to combat inflation and stabilize the naira.

The series of rate hikes aimed to curb excess liquidity and address economic volatility.

This has created mixed reactions, with some analysts praising the pause as a signal of potential economic stabilization, while others express concerns about sustained high borrowing costs impacting businesses and consumers.

The decision to hold rates comes as Nigeria navigates a complex economic landscape, with inflation rates hovering above 30% and foreign exchange challenges persisting.

According to recent economic reports, the CBN’s focus on maintaining high CRR and Liquidity Ratio levels suggests continued vigilance to ensure financial stability.

What’s Next for Nigeria’s Economy?

The CBN’s decision to pause rate hikes may provide temporary relief to borrowers and businesses strained by high interest rates.

However, analysts warn that sustained inflationary pressures and global economic uncertainties could prompt further policy adjustments.

Cardoso further emphasized the MPC’s commitment to monitoring economic indicators closely, hinting at potential future actions based on emerging data.

As Nigeria’s economic policies evolve, stakeholders await further updates from the CBN on strategies to balance growth, inflation, and currency stability.

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