CBN holds benchmark rate steady in disinflation phase

The Central Bank of Nigeria has maintained its monetary policy rate at 27 per cent, reinforcing a cautious stance amid persistent but moderating inflation. The November 2025 decision by the Monetary Policy Committee came amid signs of disinflation, foreign reserve accretion, and relative exchange rate stability. Yet, the committee opted to hold the rate steady, signalling a preference to watch the lagged effects of previous rate hikes play out entirely rather than rush into an easing cycle.

The CBN justified this decision on the basis that headline inflation, although on a downward trend, remains in double digits at 16.05 per cent as of October. The bank noted that core and food inflation have also slowed, reflecting tight monetary conditions and improved food supply. Speaking at a post-MPC press briefing in Abuja, the CBN Governor, Olayemi Cardoso, argued that monetary stability is not an end but a prerequisite for sustainable growth. “After stability comes investment, and after investment comes growth,” he said, reinforcing the notion that policy consistency and market confidence remain the CBN’s priorities.

The Committee also adjusted the asymmetric corridor around the MPR to +50/-450 basis points, a technical signal intended to manage short-term liquidity while keeping a lid on inflation expectations. The liquidity ratio was maintained at 30 per cent, while cash reserve ratios for commercial banks, merchant banks, and non-TSA public deposits were retained at their existing levels. These measures show the Bank’s resolve to continue sterilising excess liquidity without disrupting financial intermediation.

While headline inflation has eased, according to data from the National Bureau of Statistics, the cost of housing and other core expenditure items remains elevated for households, especially in urban centres. Many Nigerians continue to grapple with high living costs, with limited signs of relief in their day-to-day experiences.

Speaking earlier at the Seminar for Finance Correspondents and Business Editors in Lagos, the CBN Deputy Governor, Corporate Services, Ms Emem Usoro, said that despite recent gains in stabilising the economy, more work is required to strengthen macroeconomic fundamentals and improve the living standards of Nigerians. In a keynote address delivered on her behalf by the Acting Director of the Corporate Communications Unit, Mrs Hakama Sidi-Ali, she stressed that the progress recorded so far was not sufficient to significantly improve living standards. “While progress has been made, more work is required to improve macroeconomic fundamentals and the standard of living for Nigerians,” she said.