The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has decided to retain the Monetary Policy Rate (MPR) at 27.0 per cent, citing the need to sustain progress made towards achieving low and stable inflation. This decision, taken at the 303rd meeting of the MPC, reflects the Committee’s commitment to a data-driven assessment of developments and outlook to guide future policy decisions.
The MPC’s decision to maintain the current monetary policy stance is underpinned by the continued deceleration in headline inflation (year-on-year) in October 2025, for the 7th consecutive month. Headline inflation declined to 16.05 per cent in October 2025, from 18.02 per cent in September, driven by a moderation in both food and core inflation. The Committee believes that the steady deceleration in inflation across the three measures (headline, core, and food) in October 2025, suggests that the lagged impact of previous tight policy measures is expected to continue in the near term.
As a result, the decision to retain the MPR at 27.0 per cent is expected to allow the effect of previous policy rate hikes to sufficiently transmit to the real economy and further reduce prices. The Committee also adjusted the Standing Facility corridor around the MPR at +50/-450 basis points, retained the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and 75.00 per cent for non-TSA public sector deposits, and kept the Liquidity Ratio unchanged at 30.00 per cent.
Furthermore, the Nigerian economy is showing signs of resilience, with a sustained positive trajectory in real Gross Domestic Product (GDP) growth, evidenced by a growth rate of 4.23 per cent (year-on-year) in the second quarter of 2025. The Purchasing Manager’s Index increased significantly to 56.4 points in November 2025, pointing to a more positive growth outlook for the third and fourth quarters of 2025. Gross external reserves increased by 9.19 per cent, reaching a high of US$46.70 billion on November 14, 2025, sufficient to cover 10.3 months of import for goods and services.
In addition, the MPC considered several factors when making its decisions, including the continued deceleration in headline inflation, robust performance of the external sector, sustained resilience of the banking system, and positive developments in the global economy. The Committee noted the improved domestic food supply, stable exchange rate, and base effect, which have contributed to the decline in inflation.
Moreover, the Committee believes that the lagged impact of previous tight policy measures is expected to continue in the near term, and therefore, maintaining the current stance of policy would allow the effect of previous policy rate hikes to sufficiently transmit to the real economy and further reduce prices. The MPC also commended the collaborative effort of both the fiscal and monetary authorities, which led to the recent upgrade of Nigeria’s sovereign credit rating by major rating agencies, and the delisting of the country from the FATF grey list.
Consequently, the MPC has taken several key decisions, including retaining the MPR at 27.0 per cent, adjusting the Standing Facility corridor around the MPR, retaining the CRR for Deposit Money Banks, Merchant Banks, and non-TSA public sector deposits, and keeping the Liquidity Ratio unchanged. These decisions reflect the Committee’s focus on sustaining progress towards achieving low and stable inflation, while supporting economic growth and maintaining financial system stability.
Ultimately, the MPC’s decision reflects the Committee’s confidence in the Nigerian economy’s ability to sustain its growth momentum, while maintaining price stability. The Committee reaffirmed its commitment to an evidence-based policy approach towards achieving the Bank’s mandate of price and financial system stability.
