CBN Holds Benchmark Interest Rate at 27.5% for First Time in Three Years

Written on 20/02/2025
Premium Times NG

For the first time in nearly three years, the Central Bank of Nigeria (CBN) has opted to maintain its benchmark lending rate at 27.50%. CBN Governor Olayemi Cardoso announced the decision on Thursday while addressing journalists after a two-day Monetary Policy Committee (MPC) meeting in Abuja.

Since March 2022, when the rate stood at 11.5%, the CBN has consistently raised interest rates to curb inflation.

However, the MPC stated that its unanimous decision to hold the rate was influenced by recent macroeconomic developments, which it viewed positively.

The move signals a potential shift in Nigeria’s monetary policy approach amid evolving economic conditions.



These include stability in the foreign exchange market, leading to an appreciation of the exchange rate, and the gradual moderation in PMS prices, both of which are expected to positively impact price dynamics in the near to medium term.

The benchmark rate is the standard interest rate set by central banks, used to guide lending rates and influence economic activities, inflation, and financial stability.

The central bank also retained the asymmetric corridor around the MPR at +500 to -100 basis points.

Mr Cardoso said the committee voted to retain the Cash Reserve Ratio (CRR) at 50 per cent for commercial banks, while maintaining the CRR of merchant banks at 16 per cent.

The committee also voted to retain the liquidity ratio at 30 percent.

Source