- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 27%
The Central Bank of Nigeria’s Monetary Policy Committee left the Monetary Policy Rate unchanged at 27.0 % on 25 November 2025, held the cash-reserve ratios at 45 % for deposit money banks, 16 % for merchant banks and 75 % for non-TSA public-sector deposits, maintained the 30 % liquidity ratio and recalibrated the Standing Facilities corridor to +50/-450 bp, arguing that ongoing disinflation and lingering global uncertainties warrant letting earlier tightening continue to transmit. After a 50 bp rate cut in September that followed a series of holds at 27.50 % since February, the Committee has now paused. The narrower corridor is intended to refine interbank market conditions, while the MPC welcomed banking-sector resilience and noted that 16 banks have already met new capital requirements. Headline inflation slowed for a seventh straight month to 16.05 % y/y in October from 18.02 % in September, with food inflation down to 13.12 % and core to 18.69 %, as tighter policy, exchange-rate stability, steady PMS prices and stronger food supply eased pressures; Q2-25 GDP growth quickened to 4.23 % y/y and the November PMI rose to a five-year high of 56.4. Foreign-exchange reserves rose 9.2 % to USD46.7 bn by 14 November, covering 10.3 months of imports, alongside a surplus current-account balance that has helped steady the naira and underpin a recent sovereign rating upgrade and removal from the FATF grey list. The Committee cited prospects of a global recovery under supportive policies but flagged risks from protectionism and trade tensions, and reiterated its evidence-based approach, signalling willingness to maintain the current stance until inflation declines further.
Rate evolution
From July 2025 to July 2026, the Central Bank of Nigeria eased the Monetary Policy Rate by 100 basis points to 26.5 per cent, moving from an initial hold to cuts interrupted by pauses as disinflation progressed. The shift was driven first by a need to sustain disinflation despite persistent underlying price pressures and global trade and geopolitical uncertainty, then by stronger macroeconomic stability, with falling headline, food and core inflation, exchange rate stability, firmer reserves and capital inflows, improved food supply, moderating Premium Motor Spirit prices and resilient growth creating room to support recovery even as double-digit inflation and excess liquidity kept policy cautious.
After cutting by 50 basis points in February 2026 on a balanced assessment of risks, the Committee held in May as inflation rose for a second month, judging the pickup transitory and linked to Middle East-driven energy and logistics costs, while arguing that tightening, exchange rate stability, reserve buffers, enhanced food supply and banking-system resilience should restore disinflation. It retained the policy rate again in July after headline inflation eased marginally in June, ending three consecutive months of uptick, as renewed hostilities in the Middle East heightened uncertainty and upside risks to inflation through energy prices, even as core inflation moderated on exchange rate stability, reserves increased, policy coordination helped moderate the external shock and banking recapitalisation improved financial-system resilience, leaving policy cautious, vigilant and data-driven.
In September 2026, the Committee reset the Monetary Policy Rate at 23 per cent and recalibrated the Standing Facilities Corridor to 50 basis points above and 300 basis points below the policy rate, describing the measures as an operational realignment rather than a change in stance after divergence between the policy rate and market rates weakened transmission. It judged that three consecutive months of declining headline inflation, robust external reserve buffers, improved external sector fundamentals and stronger investor confidence provided headroom for the reset without undermining disinflation, while flagging prolonged Middle East tensions and election-related spending as upside risks and keeping future decisions data-dependent.