The Central Bank of Nigeria (CBN) has kept the country’s benchmark interest rate at 27% following a cautious vote by the Monetary Policy Committee (MPC) at its 303rd meeting.
The decision signals the apex bank’s continued focus on controlling inflation and managing system liquidity in the face of persistent macroeconomic pressures.
The committee maintained all major policy parameters, reinforcing the tight monetary environment introduced earlier in the year.
Under the latest decision, the Cash Reserve Ratio (CRR) remains 45% for commercial banks and 16% for merchant banks, while the elevated 75% CRR on non-TSA public-sector deposits remains unchanged. The Liquidity Ratio (LR) was also retained at 30%.
In a notable adjustment, the MPC revised the standing-facilities corridor to +50 / –450 basis points around the Monetary Policy Rate (MPR).
The narrower upper bound and deeper lower band are designed to help the CBN control short-term market liquidity while discouraging excessive reliance on its lending window.
The MPC said the decision to hold interest rates reflects the need to consolidate the disinflation gains recorded in recent months.
With inflation remaining above desired levels and foreign-exchange pressures still active within the system, the committee opted to avoid policy easing that could reignite price instability.
For businesses and households, the retention of the 27% interest rate means borrowing costs will remain elevated.
Commercial lending rates are expected to hold within current ranges, limiting the ability of firms to take on new credit while keeping pressure on operating costs.
Analysts say the MPC’s posture shows that the central bank is prioritising macroeconomic stability over growth stimulation.
With the high CRR forcing banks to lock up significant portions of customer deposits, liquidity available for lending remains restricted. This helps the CBN manage inflation but limits credit expansion in the private sector.
The new corridor structure offers insight into the bank’s tactical approach. The tighter upper bound reduces incentives for banks to borrow from the CBN overnight, while the expanded lower bound encourages them to park excess liquidity instead of lending aggressively.
Looking ahead, the MPC highlighted that inflation trends, global interest-rate movements, exchange-rate developments and domestic supply-side conditions will determine future adjustments.
Unless inflation slows sharply or external conditions improve, analysts expect the CBN to maintain its tight position through the next policy cycle.
The meeting’s outcome underscores the central bank’s message to the market: inflation and FX stability remain the priority, and policymakers are prepared to hold interest rates at restrictive levels until clear evidence of sustained macroeconomic improvement emerges.