CBN Holds Interest Rate Steady at 27.5%, Pauses on Further Tightening

The Central Bank of Nigeria (CBN) has opted to maintain the benchmark interest rate at 27.5%, following a unanimous decision reached at the Monetary Policy Committee (MPC) meeting held on Tuesday in Abuja.

Announcing the outcome of the committee’s 300th meeting, CBN Governor Olayemi Cardoso stated that all policy parameters, including the Cash Reserve Ratio (CRR), would remain unchanged. The CRR stays at 50% for Deposit Money Banks and 16% for Merchant Banks.

“This was a unanimous decision by the Committee to keep all monetary indicators unchanged,” Cardoso said during a post-meeting briefing.

This marks the second time in 2025 that the central bank has left the Monetary Policy Rate (MPR) untouched, following a period of aggressive rate hikes throughout 2024 aimed at curbing inflation and stabilizing the naira.

According to Governor Cardoso, the MPC decided to take a cautious pause to observe the effects of previous rate increases on key economic indicators such as inflation, economic growth, and currency exchange rates.

“The Committee acknowledged recent positive trends in macroeconomic indicators and believes these developments could support price stability in the medium term,” Cardoso noted.

He also pointed to gains in the foreign exchange market, including the naira’s appreciation, as well as a steady reduction in fuel prices, particularly Premium Motor Spirit (PMS), as encouraging signs that supported the MPC’s decision to hold rates.