BY NGOZI ONYEAKUSI

CBN Governor, Olayemi Cardoso

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the MPR at 27.50 per cent, thus making it the second consecutive time in 2025.

The decision was announced by the CBN Governor, Yemi Cardoso following the Committee’s 300th meeting which ended today  in Abuja.

The Committee equally retained the asymmetric corridor  at +500/-100 basis points as well as the Cash Reserve Ratio of Deposit Money Banks at 50.00 per cent, that of Merchant Banks at 16 per cent and  Liquidity Ratio at 30.00 per cent.

The Committee reviewed developments in the global and domestic economies including the risks to the outlook.

All twelve members of the Committee were in attendance
and were unanimous in its decision to hold policy .

The MPC noted the relative improvements in some key macroeconomic indicators which are expected to support the overall moderation in prices in the near to medium term. These include the progressive narrowing of the gap between the Nigeria Foreign Exchange Market (NFEM) and Bureau De
Change (BDC) windows, the positive balance of payments position, and easing
price of PMS.

 

Members also noted with satisfaction the progressive moderation in food inflation and, therefore, commended the government for implementing measures to increase food supply as well as stepping up the fight against
insecurity, especially in farming communities. The MPC, thus, encouraged
security agencies to sustain the momentum while government provides necessary inputs to farmers to further boost food production.

The Committee, however, acknowledged underlying inflationary pressures
driven largely by high electricity prices, persistent foreign exchange demand
pressure and other legacy structural factors.

 

The MPC noted new policies
introduced by the Federal Government to boost local production, reduce
foreign currency demand pressure, and thus, lessen the pass-through to domestic prices.

Given the relative stability observed in the foreign exchange market, Members
urged the Bank to sustain the implementation of the ongoing reforms to further boost market confidence.

 

The Committee also called on the fiscal authority to
strengthen current efforts at enhancing foreign exchange earnings, especially from gas, oil and non-oil exports.

The MPC, however, expressed concerns about the recent decline in crude oil prices, attributable to increased production by non-OPEC members.