Monetary Tightening Continues: CBN Retains MPR at 27.5%

The Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 27.5 percent for the third consecutive time in 2025, as part of ongoing efforts to curb inflation and stabilise the economy.

Olayemi Cardoso, governor of the apex bank, announced the decision on Tuesday at the end of the Monetary Policy Committee’s (MPC) 301st meeting in Abuja. The MPR, which serves as the benchmark interest rate for the economy, was last retained in February and May.

Cardoso said the MPC voted to retain the MPR at 27.5 per cent, adjust the asymmetric corridor to +500 and -100 basis points around the MPR, keep the cash reserve ratio (CRR) at 50 per cent, and maintain the liquidity ratio at 30 per cent.

He said the decision was made to “sustain the momentum of disinflation and sufficiently contain price pressure”.

The committee’s stance comes amid a slight drop in Nigeria’s inflation rate to 22.22 percent in June, down from 22.97 percent in May — the third straight month of decline. Cardoso attributed the moderation to “the moderation in energy prices and stability in the foreign exchange market”.

Despite this, he warned of continued pressure on prices: “Members observed the uptick in month-on-month headline inflation, suggesting the persistence of underlying price pressures.”

Cardoso also flagged external risks, noting that “continued global uncertainties associated with tariff wars and geopolitical tensions could further exacerbate supply chain disruption and exert pressure on the prices of imported items”.

On a positive note, he reported that “gross external reserves rose to $40.11 billion as of July 18, providing about 9.5 months of import cover”.

The next MPC meeting is scheduled for September 22 and 23.