CBN Retains Interest Rate at 27.5%, Cites Inflation, Global Uncertainty.

By Ohworisi Elohor.

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) had resolved to retain the Monetary Policy Rate (MPR) at 27.5 percent, following its 101st meeting held in Abuja on Tuesday.

The decision was attributed to sustained inflationary pressures and uncertainties in the global economic environment. Other key policy parameters were also left unchanged. The asymmetric corridor around the MPR was held at +500/-100 basis points, while the Cash Reserve Ratio (CRR) remained at 50 percent for Deposit Money Banks and 16 percent for Merchant Banks. The Liquidity Ratio was sustained at 30 percent for all banks.

CBN Governor, Mr. Olayemi Cardoso, who addressed journalists at the end of the meeting, explained that the policy stance was maintained to strengthen the ongoing dis-inflationary trend and to manage persistent price pressures in the economy.

According to Cardoso, “The Committee resolved to hold all policy parameters constant to consolidate recent gains in inflation management. The decision was based on the need to continue addressing inflationary concerns, while supporting macroeconomic stability.”

It was noted by the Committee that headline inflation had declined for the third consecutive month in June 2025. The moderation in energy prices and a relatively stable foreign exchange market were said to have contributed to the development. However, the MPC expressed concern over the month-on-month increase in inflation, highlighting lingering underlying pressures.

Global uncertainties, particularly tariff disputes and geopolitical tensions, were also cited as factors that could disrupt supply chains and impact the cost of imported goods.

In its review of the banking sector, the Committee disclosed that eight banks had already met the new minimum capital requirements as of July 18. Others were said to be making steady progress toward the recapitalization deadline.

The nation’s external reserves were reported at $40.1 billion, which was estimated to provide import cover for nine and a half months. The MPC urged the CBN to maintain oversight of the financial system to preserve stability and ensure soundness across the banking sector.

The Committee also called on the government to intensify efforts in supporting the agricultural sector, especially through timely provision of high-yield seeds, fertilizers, and essential inputs for the current farming season.

On the broader economy, the MPC observed that real Gross Domestic Product (GDP) grew by 3.13 percent in the first quarter of 2025, compared to 2.27 percent and 3.38 percent recorded in the corresponding and preceding quarters of 2024, respectively.

While gradual recovery in global output was acknowledged, the Committee cautioned that ongoing global frictions may continue to pose risks to Nigeria’s economic stability in the near term.