The Central Bank of Nigeria has maintained its Monetary Policy Rate at 27 percent, marking the fourth consecutive pause this year. This decision prioritizes stability amid a slowing inflation cycle, with the bank opting for caution to allow earlier tightening measures to take effect.
The Monetary Policy Committee’s decision in November 2025 came amid signs of disinflation, with headline inflation at 16.05 percent as of October. Despite this downward trend, the committee chose to hold the rate steady, citing the need to watch the lagged effects of previous rate hikes play out. The bank also adjusted the asymmetric corridor around the MPR to +50/-450 basis points to manage short-term liquidity and keep a lid on inflation expectations.
CBN Governor Olayemi Cardoso emphasized that monetary stability is a prerequisite for sustainable growth, stating that “after stability comes investment, and after investment comes growth.” The bank’s decision reflects a cautious approach to balancing easing with inflation control, with a focus on maintaining a predictable policy environment.
Nigeria’s gross external reserves rose to $46.7 billion in mid-November 2025, representing a 9.2 percent increase from September. This buffer provides import cover for 10.3 months and reflects a more transparent, market-driven foreign exchange system. The narrowing gap between the official and parallel market exchange rates has also boosted confidence in the CBN’s managed float regime.
However, inflation risks persist, with global commodity prices, geopolitical tensions, and domestic food supply shocks potentially derailing the disinflation trend. The CBN believes that keeping rates unchanged will help anchor expectations, allowing earlier tightening measures to filter through.
The bank’s decision has received mixed reactions from economic experts and members of the Organised Private Sector. Some have commended the decision, urging the CBN to consider reducing the rate in the future. Others have argued that the conditions for borrowing remain harsh for Micro, Small, and Medium-sized Enterprises, despite improvements in macroeconomic indices.
The CBN’s move is seen as a cautious approach, given the uncertainties in the global economy. The bank’s focus on sustaining investor confidence in Nigeria’s markets and its shift towards a more conventional policy approach are key themes emerging from the meeting. As the economy continues to navigate a slowing inflation cycle, the CBN’s decision will be closely watched for its impact on growth and stability.
