CBN Monetary Policy Committee retains MPR at 27.50%

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BY BONNY AMADI

Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) on Thursday announced the retention of its monetary policy rate at 27.50 per cent, following the conclusion of its 299th meeting on the 19th and 20th of February 2025 to review recent economic and financial developments as well as assess the risks to the outlook for 2025.

The report by the CBN governor, Olayemi Cardoso at the end of the meeting, disclosed that all twelve members of the Committee were in attendance.

On the decisions of the MPC, the Committee was unanimous in its decision to hold all parameters and thus decided, to Retain the MPR at 27.50 per cent, Retain the asymmetric corridor around the MPR at +500/- 100 basis points, Retain the Cash Reserve Ratio of Deposit Money Banks at 50.00 per cent and Merchant Banks at 16 per cent and also Retain the Liquidity Ratio at 30.00 per cent.

To arrive at the decisions, the CBN Governor, Cardoso said in a signed statement made available to our correspondent that the committee took into consideration recent macroeconomic developments which are expected to positively impact price dynamics in the near to medium term. “These include the stability in the foreign ex- change market with the resultant appreciation of the exchange rate and the Central Bank of Nigeria gradual moderation in the price of Premium Motor Spirit (PMS)”.

Members, however, were not oblivious of the risk of persisting inflationary pressures driven largely by food prices. The Committee noted the recent rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS) which reviewed the weights of items in the consumption basket to reflect current consumption patterns.

The Committee further noted that as the Federal Government continues to improve security in food producing communities, supported by other measures to enhance food supply, food prices are expected to continue to moderate.

Members reiterated the benefits of increased collaboration between the monetary and fiscal authorities, demonstrated at the recently concluded Monetary Policy Forum organized by the Bank. The MPC thus urged the continued strengthening of this collaboration to achieve the mutually beneficial objectives of price stability and sustainable growth.

The Committee highlighted the benefits of the improvements in the external sector to exchange rate stability, including the convergence of rates between the Nigeria Foreign Exchange Market (NFEM) and the Bureau de Change (BDC), and urged the Bank not to relent in its effort to boost market liquidity.