At its 300th meeting in Abuja, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) decided to retain the benchmark interest rate at 27.5%, as widely anticipated by analysts. Other monetary policy parameters were left unchanged, with the committee maintaining its tight stance to manage inflationary pressures and stabilize the exchange rate.
The MPC noted that recent tightening measures have contributed to easing inflation, with year-on-year headline inflation dropping to 23.71% in April 2025, down from 24.23% in March. Month-on-month inflation also declined to 1.86%, from 3.9% previously.
While the move aims to anchor inflation expectations and manage liquidity, it comes with trade-offs. The high-interest rate environment has raised borrowing costs for businesses and households, potentially dampening investment, consumption, and overall economic growth.
Critics have expressed concern that prolonged monetary tightening could undermine recovery efforts, particularly in sectors heavily reliant on affordable financing. Nonetheless, the MPC emphasized its commitment to balancing price stability with economic sustainability.