CBN Maintains Benchmark Rate at 27% as Inflation Slows
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Nigeria’s Central Bank kept its benchmark interest rate at 27 percent during its November monetary policy meeting to sustain progress on inflation control and stable prices. Governor Olayemi Cardoso announced the decision after a two-day Monetary Policy Committee (MPC) meeting in Abuja, citing the continued slowdown in inflation and the need for previous measures to fully transmit through the economy.
The MPC retained the Cash Reserve Ratio (CRR) for commercial banks at 45 percent, merchant banks at 16 percent, and the liquidity ratio at 30 percent. It also maintained the CRR for non-TSA public sector deposits at 75 percent and adjusted the asymmetric corridor around the policy rate to +50/-450 basis points to discourage idle deposits and spur lending. The move followed September’s reduction of the Monetary Policy Rate by 50 basis points—the first cut since 2020—as inflation began easing from earlier peaks.
Headline inflation declined to 16.05 percent in October from 18.02 percent in September after reaching historic highs in 2023 driven by fuel subsidy removal and naira depreciation. The slowdown reflected tighter monetary conditions, improved food supply, stable petrol prices, and exchange rate stability. The committee observed a stronger external position marked by a current account surplus, reserve accretion, and a firmer currency.
Members noted improved investor sentiment following Nigeria’s removal from the Financial Action Task Force grey list and a credit rating upgrade. The banking sector remained resilient, with most institutions meeting regulatory thresholds and 16 banks fully compliant with new recapitalisation requirements.
