CBN keeps the MPR at 27% to sustain inflation stability
The Central Bank of Nigeria recently opted to keep its benchmark interest rate (MPR) unchanged at 27%, following its 303rd Monetary Policy Committee meeting.
This decision — coming after a modest cut to 27% in September — reflects the bank’s intention to let previous policy adjustments fully filter through the economy before making further changes.
According to CBN’s Governor Olayemi Cardoso, the retention stems from a cautious evaluation of current data: while inflation is gradually declining — supported by stable exchange rates, improved capital inflows and a healthier banking sector — headline, food, and core inflation remain elevated and warrant sustained vigilance.
The bank also pointed out that 16 banks recently met its recapitalization requirements — a sign of improved financial-sector stability.
The decision has drawn mixed reactions. Some analysts argue that maintaining such a tight monetary stance could hinder economic growth and weigh heavily on small businesses and SMEs, which already struggle with high borrowing costs if credit remains expensive.
Others defend the move as prudent, stressing that the priority must remain price stability before any significant rate cuts.
By holding the MPR at 27%, CBN appears to be striking a balance: ensuring that the benefits of prior tightening — falling inflation, more stable exchange rate, healthier bank sector — are consolidated, while postponing aggressive rate cuts until macroeconomic conditions become more robust and predictable.
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