No excitement as CBN keeps MPR rate at 27%
The MPC decision balances inflation control with the need for accessible loans for households and businesses.
Nigeria’s Central Bank has just made a deliberate choice, and it could shape borrowing, investment, and growth for months to come. On 25 November 2025, after its two‑day meeting in Abuja, the Monetary Policy Committee (MPC) confirmed that the Monetary Policy Rate (MPR) remains at 27 percent.
At the same time, it adjusted the policy corridor to +50/‑450 basis points, and kept the Cash Reserve Ratio (CRR) at 45 percent for deposit‑money banks and 16 percent for merchant banks. The Liquidity Ratio was also maintained at 30 percent.
Central Bank Governor Olayemi Cardoso explained that the decision was driven by a need to “consolidate recent gains in the fight against inflation”, while avoiding disruption of a still-fragile economic recovery. According to newswires, he emphasised that headline inflation remains high, calling for continued effort to moderate it further.
Holding the MPR steady sends a clear signal to borrowers and savers alike. For companies, it means borrowing costs will not drop immediately, those planning to invest in machinery or expand operations may need to delay those plans.
For individuals, easier mortgages or cheaper personal loans are not yet on the horizon. But the widened corridor gives the central bank more flexibility in managing liquidity, encouraging banks to lend, rather than deposit excess funds.
Analysts interpret the corridor adjustment as a subtle form of easing, not by lowering the main rate, but by nudging banks to move money out of central bank accounts and into lending. Reports suggest this signals “growing confidence in both the inflation trajectory and FX stability”. The move could make it more attractive for banks to lend, even if headline borrowing rates do not shift drastically.
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The decision also reflects the CBN’s broader strategy: support growth without sacrificing macroeconomic control. Inflation may be cooling, but the central bank appears to believe the economy is not yet stable enough to warrant further rate cuts. Cardoso himself noted that sustaining progress is as important as making gains.
For savers, this stable rate environment offers predictability. Fixed‑income investments like treasury bills or government bonds remain appealing, particularly in a market where yield is still significant. But the potential upside of more aggressive lending could still make riskier investments popular among those chasing higher returns or faster growth.
On the business front, predictable rates help with planning, especially for firms that rely heavily on credit. With the corridor adjustment, some companies may now find it easier to access short-term liquidity. However, much depends on how commercial banks respond. If they see opportunity, lending could improve; if they remain risk-averse, credit may stay tight.
In summary, the MPC’s decision is about more than holding a policy rate steady. It is about managing expectations. By combining a stable MPR with a more flexible corridor, the central bank is signalling both caution and confidence: caution against runaway inflation and currency risk, and confidence that the trajectory of disinflation and recovery can continue.
For everyday Nigerians, whether entrepreneurs, borrowers or savers, this moment is not just policy; it is a reflection of the economy’s pulse. The CBN has chosen to tread carefully. The real test now is whether this path will help support sustainable growth or prolong the wait for cheaper borrowing.
