CBN retains interest rate at 27.5%

• Nigeria’s external reserves hits $38.9bn

• Insists $1bn monthly remittance target feasible

From Adanna Nnamani, Abuja

The Central Bank of Nigeria (CBN) has again retained the Monetary Policy Rate (MPR) at 27.5 per cent.

CBN Governor Olayemi Cardoso disclosed this at a press briefing after the 300th Monetary Policy Committee (MPC) Meeting in Abuja on Tuesday.

This marks the second time the apex bank would be retaining the interest rate in 2025. In 2024, it increased the rate six consecutive times.

Cardoso, explained that the Committee opted to hold rates in light of the recent improvements in key macroeconomic indicators and to allow for better understanding of ongoing domestic and global developments.

The MPR is the benchmark interest rate used to control inflation and influence lending rates in the economy.

Other monetary parameters were also retained: the asymmetric corridor was left at +500/-100 basis points around the MPR, the Cash Reserve Ratio (CRR) at 50 per cent for deposit money banks and 16 per cent for merchant banks, and the liquidity ratio at 30 per cent.

The CBN Governor said the Committee’s decision was informed by a modest decline in headline inflation, easing pressures in the foreign exchange market, improved gross external reserves, and growing investor confidence.

Headline inflation eased to 23.71 per cent in April 2025 from 24.23 per cent in March, according to the National Bureau of Statistics. Core inflation fell to 23.39 per cent from 24.43 per cent, while food inflation also moderated.

Cardoso attributed the food inflation slowdown to increased supply and enhanced security in farming communities. He commended the government’s efforts in tackling insecurity and distributing critical inputs to farmers, urging sustained support for agriculture.

He, however, acknowledged that inflationary pressures remained due to electricity costs, currency volatility, and structural bottlenecks.

On the external front, the CBN said Nigeria’s gross reserves rose by 2.85 per cent to $38.90 billion as of May 16, while the balance of payments recorded a surplus of $1.10 billion in Q4 2024.

Despite the positive trend, the Committee expressed concern over recent declines in crude oil prices driven by rising non-OPEC supply and uncertainties surrounding global trade policies.

On diaspora remittances, Cardoso admitted that a trust deficit still exists among Nigerians abroad, making it expensive and unattractive to remit funds.

He said the CBN is working to address the gap through innovative products and Know Your Customer (KYC) measures, as well as with support from commercial banks and the Nigeria Inter-Bank Settlement System (NIBSS), adding that the recently launched Non-Resident Nigerians Bank Verification Number (NRBVN) platform could be a game-changer.

“We have a target of getting inflows from that segment of one billion dollars a month. It may seem like a tall order, but it is not.

“And I remember when we first engaged on this discussion, people laughed and thought that nothing was possible. And we went from 200 to about 600 million U.S. Dollars kicking at one point in time a month. So this is the Nigerian spirit at work. There is nothing that will stop us from getting there and even exceeding that,” the CBN boss declared.

Cardoso stressed that the role of the CBN is to act as a catalyst, while private banks drive product innovation and engagement with the diaspora community.

The next MPC meeting is scheduled for July 21 and 22, 2025.