The Central Bank of Nigeria has held its monetary policy interest at 27.50%, as announced by the governor, Olayemi Cardoso, at the 299th Barrier Policy Committee meeting on Thursday.
The decision followed the National Bureau of Statistics which rebased its Consumer Price Index, which reduced annual inflation to 24.48% in January 2025.
Cardoso stated that the committee unanimously agreed to retain the MPR at 27.50% and maintain existing parameters, including the asymmetric corridor at +500/-100 basis points, Cash Reserve Ratio at 50.00% for Deposit Money Banks and 16% for Merchant Banks, and the Liquidity Ratio at 30.00%.
In his commentary on the revised inflation numbers, financial analyst Kalu Aja emphasised that the 10% drop in the reported inflation rate is due to a shift in the measurement period rather than a real drop in prices.
He warned that an early rate drop could result in excessive monetary growth and backed the CBN’s choice to keep the present MPR.
Aja went on: “Psychologically, a lower inflation number seems like a win, but the hope is that it’s not a pyrrhic victory showcasing form over substance.”
The CBN’s decision reflects a cautious monetary policy approach that seeks to strike a compromise between inflation management and economic growth, particularly in light of recent data adjustments.