No Interest Rate Cut on Loan Yet as CBN Retains MPR at 27%, Continues Inflation Fight

• The CBN has announced its decision after the 303rd Monetary Policy Committee meeting held in Abuja
• The 12-member committee agreed to retain the benchmark Monetary Policy Rate at 27% and also leave other key indicators unchanged.
• This decision means businesses and borrowers will continue to wait longer before accessing cheaper loans

Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR) at 27%, extending its tight monetary stance amid ongoing efforts to curb inflation and stabilise the foreign exchange market.

The decision was announced on Tuesday, November 25 at the end of the 303rd meeting of the Monetary Policy Committee (MPC) in Abuja, where members voted to leave all key policy indicators unchanged.

The MPR, which serves as the benchmark lending rate for the economy, has remained elevated as the CBN intensifies measures aimed at reducing price pressures and restoring investor confidence.

Read also

CBN gives update on Nigeria economy "more work needed"

Key decisions of the MPC meeting include:

• MPR maintained at 27.00%.
• Cash Reserve Ratio (CRR) retained at 45.00% for Deposit Money Banks and 16.00% for Merchant Banks.
• 75% CRR on non-TSA public sector deposits maintained.
• Liquidity Ratio held at 30.0%.
• Asymmetric corridor adjusted to +50/-450 basis points around the MPR.

CBN Governor Olayemi Cardoso said the committee’s decision reflects its assessment that tightening policies are beginning to deliver results, Punch reports.

He pointed to slowing inflation and improved liquidity in the foreign exchange market as early signs of progress.

While acknowledging that inflationary pressures remain elevated, Cardoso said holding the MPR at its current level provides necessary support for sustaining downward movement in prices and anchoring market expectations. He added that the decision received overwhelming support from MPC members.

The Committee also reviewed other policy instruments and approved changes to strengthen monetary transmission.

The standing facilities corridor was adjusted, narrowing the upper band and widening the lower band to give the Bank more flexibility in managing short-term borrowing and deposit activity within the financial system.

Read also

Nigerians spend $1.39 billion on foreign education in six months

With key parameters unchanged, the CBN signalled continuity in its policy direction as it seeks to stabilise the macroeconomic environment and guide inflation back toward its medium-term target.

What does it mean for banks' loan

The unchanged rates mean Nigerian bank customers will have to wait longer for lower loan rates.

Analysts had expected that the CBN would reduce rates following the drop in inflation in October to 16%.

Naira to dollar exchange rate projection

Earlier, Legit.ng reported that Murtala Sagagi, a member of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC), has projected that the naira would appreciate to N1,450 per US dollar by the end of 2025.

According to Sagagi, Nigerian currency, the naira, is expected to sustain its positive trajectory through 2025.

He believes the currency's recent gains may continue, supported by coordinated policy actions from both monetary and fiscal authorities to stabilise the exchange rate.

Proofreading by James Ojo, copy editor at Legit.ng.

Source: Legit.ng