The MPC decided to maintain the Monetary Policy Rate (MPR) at 27%, while adjusting the Standing Facility corridor around the MPR at +50/-450 basis points.

Cash Reserve Requirements (CRR) were also retained: 45% for Deposit Money Banks, 16% for Merchant Banks, and 75% for non-TSA public sector deposits. The Liquidity Ratio remained unchanged at 30%.

The Committee said the decision reflects the need to sustain progress toward achieving low and stable inflation. It also highlighted that sixteen banks have now fully complied with revised capital requirements, urging all banks to ensure continued implementation and adherence to recapitalisation policies.

According to the MPC communiqué, Nigeria’s headline inflation stands at 16.05%, food inflation at 13.12%, and foreign reserves at US$46.70 billion as of November 14, 2025.

Headline inflation (year-on-year) further declined to 16.05% in October 2025, from 18.02% in September, driven by a moderation in both food and core inflation. Food inflation fell significantly to 13.12% in October 2025 from 16.87% in the preceding month, reflecting improved domestic food supply, stable exchange rate, and base effect.

Similarly, core inflation slowed to 18.69 per cent (year-on-year) in October 2025, from 19.53% in the preceding month, owing largely to a decline in the price of furnishing & household maintenance.

Real Gross Domestic Product (GDP) for the second quarter of 2025 sustained its positive trajectory, evidenced by the growth rate of 4.23 per cent (year-on-year), compared with 3.13% in the first quarter of 2025.

In addition, the Purchasing Manager’s Index increased significantly to 56.4 points in November 2025, the highest in the last five years, pointing to a more positive growth outlook for the third and fourth quarters of 2025.

Gross external reserves increased by 9.19%, reaching $46.70 billion on November 14, 2025, from $42.77 billion at end-September 2025, sufficient to cover 10.3 months of imports for goods and services.”

The MPC concluded with a positive outlook for food supply and prices, attributing expected moderation in inflation to the ongoing seasonal harvest cycle.

“The Committee’s forecast indicates a sustained disinflation in the near term, to be largely driven by the lagged impact of previous monetary policy tightening measures, supported by the continued stability in the foreign exchange market. In addition, the ongoing seasonal harvest cycle is expected to boost local food supply and further moderate food prices.”

Governor Olayemi Cardoso made the announcement on Tuesday, confirming that the decision was unanimous among committee members. 

Alongside the Monetary Policy Rate (MPR), the Cash Reserve Ratio (CRR) for commercial banks remains fixed at 50%, while mortgage banks continue with 16%. The Liquidity Ratio (LR) stays at 30%, and the asymmetric corridor remains unchanged at +500/-100 basis points around the MPR.

This decision is coming against the backdrop of slightly improving inflation figures. Nigeria’s inflation rate eased to 23.7% in April, according to the National Bureau of Statistics. That figure, though still high, provided a narrow window for policymakers to pause further tightening.

Cardoso offered a measured explanation for the committee’s choice: “The committee unanimously agreed to retain MPR at 27.50 percent.” The rationale, he said, was based on ongoing economic adjustments and the need to consolidate recent gains.

This pause is a cautious departure from a series of previous hikes. Since mid-2023, the CBN has steadily increased rates in a bid to fight inflation and manage currency volatility. The current move, while conservative, signals a wait-and-see approach amid fragile macroeconomic conditions.

We’re also watching the naira. As of last week, the official exchange rate hovered around N1,598.72 per dollar, with the parallel market offering slightly worse at N1,635. This narrowing gap is one of the few indicators suggesting some stability, though risks remain.

Inflation is the major concern. Food prices continue to stretch household incomes, and insecurity in food-producing states only complicates matters. “Members, however, were not oblivious to the risk of persisting inflationary pressures driven largely by food prices,” Cardoso said at the briefing.

From where we stand, it’s obvious that the CBN is trying to strike a balance. They’re holding the line, hoping that prior policies begin to bite, but also ready to act again if inflation refuses to budge. The decision to maintain high reserve requirements for banks also sends a strong message, liquidity will be tightly managed.

In plain terms, the CBN is being careful. There’s no rush to ease. No gamble. Just methodical restraint in the hope that inflation softens, the currency strengthens, and confidence returns.

The next MPC meeting is expected to take place in the coming weeks. By then, we’ll have fresh inflation numbers, a better sense of GDP growth, and perhaps a clearer picture of how long this high-interest-rate environment can be sustained.

Aiming to tackle inflation and stabilise the economy, the decision, announced by Governor Yemi Cardoso at the conclusion of the year’s final Monetary Policy Committee (MPC) meeting in Abuja, is a 25-basis-point increase from the previous 27.25%.  

This adjustment, the sixth such hike in 2024, comes as inflationary pressures keep increasing with Nigeria’s headline inflation climbing to 33.88% in October, as reported by the National Bureau of Statistics (NBS). 

The increase is a 1.18% month-on-month rise and a year-on-year surge of 6.55% compared to October 2023. Factors such as higher food prices and transportation costs have been key contributors to this inflationary trend.  

The MPC also maintained other parameters: the Cash Reserve Ratio (CRR) was held at 50% for Deposit Money Banks and 16% for Merchant Banks, while the Liquidity Ratio (LR) remained at 30%. The Asymmetric Corridor was retained at +500/-100 basis points around the Monetary Policy Rate (MPR).  

Explaining the decision, Cardoso noted that the committee unanimously agreed on the rate hike to address the “renewed inflationary pressures” observed in October. He noted that the measures were necessary to mitigate price instability and preserve economic stability.  

Economists have spoken about the potential impact of consecutive rate hikes on economic growth and loan repayment rates.

While the tighter monetary policy may help contain inflation, analysts argue that without complementary fiscal policies to address structural weaknesses—such as low productivity and inadequate diversification—the inflationary pressures may persist.  

Recent economic indicators further stress the challenges facing policymakers. Nigeria’s Gross Domestic Product (GDP) grew by 3.46% in the third quarter of 2024, driven primarily by the services sector. However, rising costs, a volatile naira, and declining oil production have exacerbated economic vulnerabilities.  

Analysts like Prof. Joseph Nnanna, Chief Economist at the Development Bank of Nigeria, has called for a change in focus from crude oil dependency to leveraging other untapped sectors to enhance productivity. 

Similarly, financial experts caution that the higher CBN interest rate could impact borrowers, leading to an uptick in loan defaults and non-performing loans for banks.  

Cardoso further noted the CBN’s focus on monitoring economic developments and implementing policies to achieve price stability.

The next MPC meeting is scheduled for January 2025, where further adjustments may be considered based on evolving economic conditions.  

The Monetary Policy Rate (MPR) was increased by 50 basis points, moving it from 26.75% to 27.25%. This decision was made following the Monetary Policy Committee’s (MPC) latest meeting in Abuja, chaired by CBN Governor Olayemi Cardoso.

As part of a goal to tighten monetary policy, the CBN also increased the Cash Reserve Ratio (CRR) for commercial banks, pushing it up by 500 basis points to 50%. 

Merchant banks were similarly affected, though with a smaller adjustment, seeing their CRR rise by 200 basis points to 16%. The liquidity ratio, however, remains unchanged at 30%, while the asymmetric corridor around the MPR was held at +500/-100 basis points.

Governor Cardoso emphasised that these were necessary to maintain pressure on inflation, which remains a huge issue for Nigeria’s economy. Despite some indications of moderating inflation, the MPC opted for further tightening to prevent a resurgence of price instability.

The consistent rise in interest rates, now in its fifth consecutive hike within the year is an issue for Nigerians. The CBN’s approach has been met with both support and caution, as stakeholders continue to assess the long-term impact of sustained high interest rates on economic growth and investment.

In his statement, CBN Governor justified the multiple interest rate hikes, stating that without these measures, inflationary pressures would have worsened, further straining the economy. 

He noted the importance of keeping inflation in check, noting that no economic model could successfully alleviate poverty in an environment where inflation remains unchecked.

He made the remark an exclusive interview with Techeconomy correspondent, against the background of the new 26.25 percent interest rate set by Nigeria’s apex bank.

According to Aremu of the Peculiar Innovative Consulting,

“For the demand side of the capital, those who are into manufacturing, those who want to lend money to do business, there will be an increase cost on the source of their fund, hence some of them may be discouraged to get money from the market to industrialized or even do bigger businesses as it were. Because the interest cost will be quite killing for them and it will also discourage business from also scaling up”

The real economy concerns the production, purchase and flow of goods and services (like oil, bread and labour) within an economy.

It is contrasted with the financial economy, which concerns the aspects of the economy that deal purely in transactions of money and other financial assets, which represent ownership or claims to ownership of real sector goods and services.

Speaking further, he noted that ‘’if the government can see what they can do  to subside or give incentives to all those who are into real development like; Agriculture, Manufacturing,  and industrialization,  it  will   enhance employment, and  facilitate Economic development.

Aremu also suggested that the government should give ‘’ incentive, especially on  the rate so that when they are borrowing  money, the money is borrowed at a cheaper cost lower than the MPC rate, this will serve as cushioning effect.’

Recall that the Central Bank of Nigeria (CBN), Tuesday this week raised its benchmark interest rate by 150 basis points to 26.25 percent, the third straight hike this year, to control the rising prices of goods and services and to ensure stability of the naira.

After the two-day Monetary Policy Committee (MPC) meeting in Abuja, the members agreed to hold other parameters unchanged. Consequently, the CBN retained the asymmetric corridor around the MPR at +100/-300 basis points, cash reserve ratio (CRR) at 35 percent, and retained the liquidity ratio (LR) at 30 percent.

The analyst noted that, “the increase in the interest rate by the Central Bank of Nigeria (CBN, has two sides effects, number one, it have an effects on the supply side of the capital which is the investor

“For the investors is a positive one, for those who are  investing in treasury bills and  instrument that are safe in the financial market, they would expect that interest rate will begin to go up and that they should have more returns on their investment. ”

“But again, we are still not yet beating inflation, the inflation with our rate of returns on Nigeria financial market.  As we speak everybody fund is still at negative real return.

“Any reform that is not covering inflation  presupposes a negative return, Inflation is still on the high side and they are having the interest rate increased to 26.25% that is telling you that we still have about nearly minus 8 or thereabouts that is still hanging.”

‘’Anyway, it seems better than nothing, and for those investing in the Treasury bill financially safe instrument is a good one. They should expect the rate to go up and get more returns for their investment, thus that is a good one that for the supply capital,” he said.

The price of a loaf of bread has gone from N1,000 in November, 2023 to N1,400 by the end of February, 2024. The reason for the astronomical increase is due to the rise in the cost of input materials such as flour, sugar, butter, etc. It was not because more people now eat bread.

The price of bus fare from Ajah to Oshodi has risen from N1,500 to N2,500. It is not because more people now travel to Oshodi from Ajah daily, but because of increase in the price of petrol.

A paint bucket of beans used to go for N3,000, but it is now N5,500. It is not because more people are queuing up to buy beans but because the cost of farming input such as fertilizer and labour, and transportation have risen astronomically, affecting output drastically.

This is the same with other staples such as rice, garri, etc.

The above shows that what we currently have is cost-push inflation. Yet Nigeria’s central bank went ahead to raise interest rate by 400 basis points to 22.75% in order to tackle the inflation. The same approach that the former Central Bank Governor, Godwin Emefiele adopted to no avail.

Emefiele bumped interest from 13.5 to 18.75%, but only had higher inflation to show for it.

From what I learned from basic economics, the Central Bank can only effectively use higher interest rate to subdue higher inflation when the inflation is demand-pull.

And demand-pull implies that demands have outstripped supply in an economy, due to a strong economic growth that has resulted in low unemployment and higher consumer spending.

But what we have in Nigeria is far from a demand-pull inflation. In our case, economic growth is marginal, unemployment is at a historical high, and consumer confidence is abysmally low. So, I am not exactly sure what informed of the MPC’s decision to raise the MPR.

Central Banks all over the world are concerned about price stability and jobs. And that is why to maintain price stability, Central Banks would use higher rates to control liquidity in the financial system during strong economic growth, and then lower the rates to stimulate growth by incentivizing borrowing to boost productivity, which usually translates to more jobs and higher spending during periods of economic stagnation.

By raising the interest rate at this time, the Central Bank has inadvertently raised cost of borrowing. For several businesses with ongoing obligations, the cost of servicing those facilities have also gone up. These costs will be transferred to consumers in the form of increase in the unit costs of goods and services, which is more inflation.

Worse, those businesses will likely freeze hiring and in some cases may even have to shed jobs. This is an unlikely outcome that the MPC may have hoped for in reaching their decision.

I am a bit concerned that this CBN is taking on so much at the same time in a bid to see things improve, and that may have started to impact on the quality of its decisions.

Over the past few weeks, we have seen the apex bank deploy every trick in the book, including a raft of measures aimed at stabilizing the FX market, but I have not seen much activity from the fiscal side.

What exactly are the Finance, Agric, Trade Ministries and other members of the Economic team doing? Those in charge of those ministries are not pulling their weights, and they too need to put on their thinking caps.

The writer: Jonah Solomon is an experienced business journalist, author & TV presenter with a demonstrated history of working in the print and online media industry. 

[N.B: This post was first published on Jonah Solomon’s LinkedIn page]

MAN’s Director General, Segun Ajaji Kadir, criticized the move, stating that it would have negative consequences for the country’s economy, particularly in light of the rising inflation rate.

MAN’s main concern is that the CBN’s approach to addressing inflation through interest rate hikes will exacerbate the challenges faced by the manufacturing sector.

Kadir argues that higher interest rates will discourage investment in the sector, leading to increased production costs and higher commodity prices. This, in turn, could result in a surplus of unsold manufactured products, further compounding the problems faced by the sector.

The association believes that the interest rate hike will exacerbate the impending recession in the manufacturing sector and have far-reaching negative impacts.

What Manufacturers are Saying

It asserts that the government and the CBN should explore alternative measures beyond the conventional monetary policy framework to address inflationary pressures and reposition the economy.

MAN’s critique raises several important points for consideration. First, it highlights the need for a holistic approach to tackling inflation and supporting economic growth. While interest rate adjustments can be a tool for controlling inflation, they can also have adverse effects on investment and production costs.

Therefore, the CBN should consider complementary strategies to address inflation, such as fiscal policies or supply-side interventions, to mitigate the negative impacts on the manufacturing sector.

Second, MAN’s concerns about the impact of the interest rate hike on investment are valid. Higher borrowing costs can discourage businesses from seeking financing for expansion, innovation, and job creation. This, in turn, could hinder the sector’s ability to contribute to economic growth and employment generation.

The government and the CBN should assess the overall investment climate and explore ways to incentivize private sector investment in the manufacturing sector, such as targeted tax incentives or loan guarantee programs.

Third, MAN’s call for unconventional measures to address inflationary pressures is worth considering. While interest rate adjustments are a common tool in monetary policy, they may not always be the most effective or appropriate approach in every circumstance.

Policymakers should explore a mix of demand-side and supply-side policies to address inflation, including targeted support for sectors facing cost pressures and structural challenges.

In Conclusion: criticism of the CBN’s decision to increase the interest rate reflects the concerns of the manufacturing sector regarding the potential negative consequences on investment, production costs, and the overall economy.

The government and the CBN should take these concerns into account and consider a comprehensive approach that combines monetary, fiscal, and structural policies to address inflation and support the growth of the manufacturing sector.

By doing so, they can mitigate the adverse effects of inflation while promoting a conducive environment for investment and sustainable economic development.

The International Monetary Fund (IMF) warns that increased inflation and interest rates are putting the world financial system to the test and implores banks to keep more capital and liquid assets to help them withstand shocks.

In order to assist assure system resilience, the IMF encouraged banks to perform stress tests, which it mentioned in its April 2022 Global Financial Stability Report.

To control inflation, central banks all around the world have been raising their monetary policy rates (MPR).

According to the IMF, financial stability risks had increased rapidly since October 2022 as the resilience of the global financial system faced a number of tests.

“The failures of Silicon Valley Bank and Signature Bank of New York and the loss of confidence in Credit Suisse are powerful reminders of the challenges posed by the interaction between tighter monetary and financial conditions and the build-up in vulnerabilities since the global financial crisis.

“If financial strains intensify significantly and threaten the health of the financial system amid high inflation, trade-offs between inflation and financial stability objectives may emerge,” the Fund stated.

It expressed that while the banking turmoil had raised financial stability risks, its roots were fundamentally different from those of the global financial crisis of 2008.

“The recent turmoil is different. The banking system has much more capital and funding to weather adverse shocks; off balance sheet entities have been unwound, and credit risks have been curbed by more stringent post-crisis regulations,” IMF said.

It identified a meeting between the steep and rapid rise in interest rates and fast-growing financial institutions as unprepared for the rise.

The IMF also trimmed its 2023 global growth outlook slightly as higher interest rates cooled activity, but warned that a severe flare-up of financial system turmoil could slash output to near recessionary levels.

“Our growth-at-risk metric, a measure of risks to global economic growth from financial instability, indicates about a 1-in-20 chance that world output could contract by 1.3 per cent over the next year.

There’s an equal probability that gross domestic product could shrink by 2.8 per cent in a severe tightening of financial conditions in which corporate and sovereign spreads widen, stock prices fall, and currencies weaken in most emerging economies.

“Faced with heightened risks to financial stability, policy makers must act resolutely to maintain trust,” the Fund added.“Faced with heightened risks to financial stability, policy makers must act resolutely to maintain trust,” the Fund added.“Faced with heightened risks to financial stability, policy makers must act resolutely to maintain trust,” the Fund added.

The apex bank’s Monetary Policy Committee (MPC) raised the benchmark interest rate by 50 basis points to 18.0% from 17.5% at the end of its two-day meeting on Tuesday, marking the sixth consecutive rate hike.

According to Dr. Chinyere Almona, Director General of the Lagos Chamber of Commerce and Industry (LCCI), the monetary authority’s consistent hawkish stance is in response to high inflationary pressure, but the move has not dampened the rise in inflation.

Almona said in a statement seen by TechEconomy: “This consistent hawkish stance by the monetary authority is in response to the high inflationary pressure. At 21.91%, the inflationary rate is more than twice the targeted range (6 – 9%) set by CBN. 

Since April 2022, inflation has increased from 16.82% to 21.91% in February 2023. Despite the 6.5% points increase in the key rate over the same period, inflation does not seem to be letting off.

“The price rises that continue to hit the system appear non-transitory. We, like the other market watchers, expected CBN to hold off an increase or at best moderate, the key rate given the weak relationship between it and inflation, especially after manufacturers and other businesses are groaning under high borrowing costs and the cash crisis.

“While CBN has the overarching mandate of ensuring price stability, we suggest it should not be done in a manner that compromises growth, more especially in the face of high unemployment.

Furthermore, the instrumentality of monetary policy alone appears quite insufficient to guarantee the desired results of low, stable, and predictable prices. We believe that structural rigidities around infrastructure and agriculture should be looked into and tackled to rein in inflation.

“Inflation chips away at purchasing power leads to inventory stockpiles, undermines growth, and creates a lot of economic uncertainties. Taming it, however, should not be done at the expense of growth and the most vulnerable sectors.”

After the CBN’s Monetary Policy Committee meeting, Governor of the CBN Godwin Emefiele announced this.

The interest rate that the CBN charges commercial banks is known as MPR. Lenders use it as a reference point for calculating the interest rates on loans taken out by their clients. Banks hike loan or debt interest rates when the CBN raises MPR.

MPC’s various increases in the interest rate have had a positive impact on the inflation rate, Emefiele said, adding that further rate hikes will not affect the banking industry in Nigeria, and loosening the interest rate will affect the gains achieved so far.

According to Emefiele, 10 members of the MPC voted to raise the MPR by 50 basis points, leading to the MPC raising the interest rate to 18 percent. Note that one member voted to raise the MPR by 35 basis points.

Speaking on reasons for increasing the rate, Emefiele said: “MPC examined the possible impact of further policy rate hikes on the stability of the banking system and was convinced that further rate hikes would not adversely impact the stability of the banking system.

“The committee, however, called on the bank’s management to strengthen its regulatory oversight of the banking system, to ensure that the banking industry remains stable and resilient.

“The MPC noted that while the continued rise in headline inflation remains a significant problem confronting the economy, other macroeconomics were moving in the right direction despite observed headwinds.

“The committee’s debate at this meeting, therefore, was whether to continue its rate hike to further dampen the rising inflation trajectory or hold to observe emerging development and allow for the impact of the last five rate hikes to permeate the economy. Loosening in the view of the members (MPC) will gravely undermine the gains so far achieved.

“MPC observed the continued upward risk to price development around expectations of the removal of the PMS (Premium Motor Spirit) subsidy, rising prices of other energy sources, continued exchange rate pressure, and uncertain climatic conditions.

“This, in the view of members, provides a compelling argument for an upward adjustment of the policy rate, less aggressively.”