The Central Bank of Nigeria (CBN) has decided to keep the Monetary Policy Rate (MPR) steady at 27.5 percent, citing ongoing inflation and foreign exchange pressures. This decision was made after the recent Monetary Policy Committee (MPC) meeting chaired by CBN Governor Olayemi Cardoso.
While the bank acknowledged recent progress in economic indicators, it noted that inflation remains a major concern. Factors contributing to price increases include elevated electricity tariffs, strong demand for foreign currency, and long-standing structural issues within Nigeria’s economy.
The MPC also welcomed recent government efforts aimed at increasing local production and reducing the country’s reliance on imported goods. According to the committee, these actions could help ease inflation in the long run.
Regarding Nigeria’s external sector, the MPC reviewed recent developments in the foreign exchange market. The committee encouraged the CBN to push ahead with ongoing reforms to strengthen investor confidence and stabilize the naira.
Governor Cardoso noted that the country’s foreign reserves rose by 2.85 percent, reaching $38.90 billion as of May 16, 2025—up from $37.82 billion at the end of March. This reserve now represents 7.6 months of import coverage.
The Committee also observed a narrowing gap between the official and parallel exchange rates and encouraged fiscal authorities to boost foreign exchange earnings from oil, gas, and non-oil exports.
In terms of economic growth, the MPC noted a positive uptick in Nigeria’s real Gross Domestic Product (GDP). The economy grew by 3.84 percent in the last quarter of 2024, compared to 3.46 percent in the previous quarter. This growth was supported by both the oil and non-oil sectors, especially services.
However, the CBN expressed worry about falling crude oil prices. “The Committee expressed concerns about the recent decline in crude oil prices, attributable to increased production by non-OPEC members as well as uncertainties associated with U.S. trade policy, which present new challenges for fiscal receipts and budget implementation,” Cardoso stated.
The banking sector was praised for its relative stability. The MPC urged the central bank to maintain strict oversight, particularly as banks undergo recapitalisation.
“Members reaffirmed their commitment to prioritise policies targeted at anchoring inflation expectations and easing exchange rate pressure,” the governor added.
The next MPC meeting is set for July 21 and 22, 2025.
