The Central Bank of Nigeria has once again held the Monetary Policy Rate at 27 per cent, marking the fourth time this year that the rate has remained unchanged. The decision came after the November 2025 meeting of the Monetary Policy Committee in Abuja. The committee said it preferred to maintain caution even though inflation has started to ease and the exchange rate has become more stable in recent months.
The CBN Governor, Olayemi Cardoso, said the committee agreed that earlier policy tightening was still working its way through the economy. He explained that rushing into interest rate cuts could disrupt the progress already made on stabilising prices and the foreign exchange market. According to him, “after stability comes investment, and after investment comes growth,” which is why the CBN wants to maintain a predictable environment before considering any easing.
Nigeria’s headline inflation fell to 16.05 per cent in October, down from earlier highs seen this year. The National Bureau of Statistics also reported a slowdown in core and food inflation, helped by tight monetary policies and improved food supply. However, many households continue to complain about high living costs, especially in urban centres where the cost of housing, transportation and essential goods has remained a burden.
During the meeting, the MPC adjusted the asymmetric corridor around the MPR to +50 and -450 basis points to manage short-term liquidity. The committee kept the liquidity ratio at 30 per cent, while cash reserve requirements for commercial and merchant banks were also left unchanged. These measures show that the CBN still wants to sterilise excess liquidity in the banking system without weakening overall financial stability.
Speaking earlier at a seminar in Lagos, the Deputy Governor of Corporate Services, Ms Emem Usoro, represented by Mrs Hakama Sidi-Ali, said that although the economy had recorded progress in the past months, more work was needed to improve the living standard of Nigerians. She admitted that the improvement in macroeconomic indicators had not yet translated into real relief for families.
Nigeria’s external reserves also recorded strong growth, rising to $46.7bn in mid-November 2025. This is the highest level in about seven years and provides more than 10 months of import cover. Cardoso said the rise in reserves is linked to increased transparency in the foreign exchange market, higher export earnings, more remittances from Nigerians abroad and renewed investor confidence. He added that the foreign exchange market now records an average daily turnover of about $500m without frequent intervention by the CBN.
According to him, the gap between the official exchange rate and the parallel market rate has narrowed to less than 2 per cent, showing confidence in the managed float system. He said reforms such as the willing-buyer, willing-seller model have helped stabilise the market. He also attributed the gains to Nigeria’s removal from the FATF grey list and recent upgrades by international rating agencies.
However, inflation risks remain due to global uncertainties, domestic food supply issues, and rising money supply. Nigeria’s broad money supply rose to N119.04tn in October, an increase of N1.25tn from September. The CBN said the rise was mainly due to increased government borrowing and stronger lending to the private sector.
The MPC said holding the interest rate steady would help anchor expectations as the bank works toward deeper disinflation. The committee also stressed that it would continue with orthodox monetary policies and move away from the unorthodox interventions of past years. Cardoso disclosed that the CBN had rolled back N2tn from previous intervention loans, even though N4.69tn remains unrecovered. He described the intervention era as a period that affected credit discipline in the banking sector.
He also explained that the ongoing recapitalisation of banks was progressing well, with 16 banks already meeting the new capital requirements. The CBN expects stronger banks to support economic growth both locally and internationally.
Economic analysts and business groups reacted differently to the MPC decision. The Chief Executive Officer of Arthur Stevens Asset Management, Olatunde Amolegbe, said he expected a slight reduction but understood the cautious approach. He said the holiday season usually increases consumption and could pressure prices.
President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said the decision aligned with the economic conditions and expressed hope that the CBN would cut rates soon. He noted that the inflation target of 15 per cent by December was within reach.
Chief Executive of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the CBN’s decision was a careful one given global uncertainties. He agreed that the adjusted corridor could encourage lending, but warned that the government must tackle the structural issues driving inflation.
The Director-General of the Nigerian Association of Small and Medium Enterprises, Eke Ubiji, said borrowing was still too expensive for MSMEs. He questioned why interest rates remained high despite falling inflation, arguing that the situation discouraged investment and growth. The Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, also said high interest rates continued to hurt production and weaken the competitiveness of Nigerian manufacturers.
Many experts agreed that while the CBN has recorded progress in stabilising the foreign exchange market, it must now find a balance that supports growth, reduces borrowing costs and still controls inflation.
