CBN Considers Interest Rate, Inflation, and Naira Stability at Crucial MPC Meeting Starting May 19
Written by Springnewsng media limited May 19,2025
The Central Bank of Nigeria (CBN) has convened its Monetary Policy Committee (MPC) for a pivotal two-day meeting starting Monday, May 19, through Tuesday, May 20, 2025, to deliberate on the nation’s key monetary policy direction.
As Nigeria battles economic challenges including high inflation and currency volatility, the MPC—the apex policy-making body of the CBN—is faced with the crucial decision of whether to maintain or adjust the Monetary Policy Rate (MPR), currently set at 27.50%.
This high-stakes meeting follows a slight reprieve in inflation, with Nigeria’s inflation rate easing to 23.7% in April, according to the latest Consumer Price Index released by the National Bureau of Statistics. The moderation in inflation has fueled expectations among financial analysts that the MPC may retain the current interest rate and other monetary parameters.
Meanwhile, Nigeria’s exchange rate remains unstable. Official CBN data places the naira at N1,598.72/$1, while the parallel market recorded a weaker rate of N1,635/$1 as of Friday, May 16.
Economist and CEO of the Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, urged caution against further monetary tightening. He argued that the current rates are already too high, making additional hikes counterproductive.
“The tightening option should not be on the table,” Yusuf noted. “The MPR at 27.5% is among the highest globally. The cash reserve ratio is already at 50%—the highest in the world. Adding more pressure would harm economic recovery.”
Yusuf also cited the asymmetric corridor of +500 basis points around the MPR, which implies a potential upper bound of 32.5%, underscoring the restrictive nature of current policy settings.
This policy deliberation is being watched closely by investors and the business community, especially following recent comments by CBN Governor Olayemi Cardoso. He reaffirmed the bank’s commitment to using orthodox policy tools to combat inflation and stabilize the economy.
The outcome of the MPC meeting is expected to shape Nigeria’s economic outlook in the coming months
