The Central Bank of Nigeria’s Monetary Policy Committee has decided to maintain the country’s monetary policy rate at 27 percent. This decision was announced by CBN Governor Olayemi Cardoso during a press conference following the Committee’s 303rd meeting in Abuja. The monetary policy rate serves as the baseline interest rate for the economy, influencing other interest rates.
In addition to maintaining the monetary policy rate, the Committee has committed to a tight monetary stance. This includes setting the Cash Reserve Ratio at 45 percent for commercial banks, 16 percent for merchant banks, and 75 percent for non-TSA public sector deposits. The Liquidity Ratio has been maintained at 30 percent, with the Standing Facilities Corridor adjusted to +50 / -450 basis points around the monetary policy rate.
The Committee’s decisions are aimed at achieving low and stable inflation, building on the continued deceleration in headline inflation driven by sustained monetary tightening, stable exchange rates, and fuel price stability. While inflation remains high, the Committee notes that it requires continued and coordinated policy efforts to bring it down further.
The CBN has also acknowledged progress in bank recapitalization, with 16 banks meeting regulatory requirements. On the global outlook, the CBN governor expects a medium-term recovery, despite potential growth constraints due to trade tensions between the US and its key trading partners. The Committee projects that global inflation will remain above pre-pandemic levels in the near term.
The governor reaffirmed the commitment to evidence-based monetary policy to safeguard price stability and strengthen financial system resilience. The decisions made by the Monetary Policy Committee reflect the Central Bank’s focus on managing inflation and maintaining economic stability. As the Nigerian economy continues to navigate global economic trends, the CBN’s monetary policy decisions will be crucial in shaping the country’s economic trajectory. With a watchful eye on inflation and a commitment to stability, the Central Bank aims to support sustainable economic growth and development.