Nigeria’s central bank retains key interest rate at 27.0% to consolidate disinflation

By: Chidozie Nwali

The Central Bank of Nigeria (CBN), at the conclusion of its Monetary Policy Committee (MPC) meeting on Tuesday, announced its decision to retain the benchmark Monetary Policy Rate (MPR) at 27.0%, as inflation eases for the seventh consecutive month.

CBN Governor, Mr. Olayemi Cardoso, who chaired the meeting, confirmed the unanimous decision by the committee members to hold all key policy parameters constant, with a minor adjustment to the Standing Facilities Corridor.

The primary driver for the hold decision is the successful sustained disinflation observed in the Nigerian economy. Headline inflation has steadily moderated, falling for the seventh consecutive month, from a peak of 24% in January to 16.05% in October 2025.

The MPC noted that the previous rate cut of 50 basis points (to 27%) in September, combined with stringent liquidity management measures, has achieved the desired effect of stabilizing prices and anchoring inflation expectations.

In September, Nigeria had its first interest rate cut in 5 years. The MPC slashed the rate by 50 basis points from 27.50% to 27%; after experiencing six  consecutive months of disinflation.

“The Committee’s decision was underpinned by the need to sustain the progress made so far towards achieving low and stable inflation.” Governor Cardoso said.

Aside inflation victory, the Nigerian economy has  continued its expansion, recording 4.23% real GDP growth in the second quarter of 2025, driven by strong performance in the non-oil sectors and a significant recovery in the oil sector.

Gross External Reserves have remained robust, reaching $46 billion in November providing a healthy import cover and supporting the CBN’s capacity to manage the foreign exchange market.