CBN Retains 27.50% Interest Rate as Inflation Pressures Persist

The Central Bank of Nigeria (CBN) has once again held the benchmark interest rate steady at 27.50%, signaling its continued effort to tackle the country’s high inflation and stabilize the naira. This decision was announced at the conclusion of the Monetary Policy Committee (MPC) meeting held on Monday.

The CBN had previously raised the Monetary Policy Rate (MPR) by a total of 600 basis points in the first quarter of the year, a sharp policy stance aimed at curbing inflation, which has remained stubbornly high. The decision to retain the rate comes amid mounting pressure on consumer prices, a volatile exchange rate, and sluggish economic growth.

Governor Olayemi Cardoso emphasized that the MPC’s decision reflects a cautious approach, balancing the need to manage inflation with the imperative of not stifling economic activity. Headline inflation climbed to 33.69% in April 2025, driven primarily by food and energy costs. Food inflation alone reached 40.53%, making affordability a growing concern for many households.

Analysts had predicted a hold in the rate, suggesting that further tightening at this point could deepen the burden on businesses already grappling with high operating costs and reduced consumer spending.

The committee also maintained other key monetary parameters: the Cash Reserve Ratio (CRR) at 45%, the Liquidity Ratio at 30%, and the asymmetric corridor around the MPR at +100/-300 basis points.

Financial experts view the CBN’s decision as a signal of policy consistency, giving room for past rate hikes to filter through the economy. However, they warn that without complementary fiscal reforms and improved forex liquidity, monetary tools alone may not be enough to tame inflation or strengthen investor confidence.

As Nigerians continue to navigate rising living costs, the CBN’s stance highlights the delicate balance between controlling inflation and supporting growth in an economy still struggling with structural weaknesses and external shocks.