By Adefolarin A. Olamilekan
The Central Bank of Nigeria (CBN) will today, May 19, 2025, commence the 300th meeting of its Monetary Policy Committee (MPC)—a landmark session closely watched by economists, financial institutions, and market participants alike.
The Monetary Policy Committee plays a critical role in shaping Nigeria’s economic trajectory. Its primary responsibilities include influencing interest rates, inflation control, exchange rate stability, and overall macroeconomic management. The committee also determines the Monetary Policy Rate (MPR)—Nigeria’s benchmark interest rate—which guides borrowing costs across the economy.
Presided over by the Governor of the Central Bank, who serves as its Chairman, the MPC comprises directors of the CBN and seasoned economists drawn from both the public and private sectors. Together, they deliberate on policies aimed at promoting economic stability and growth.
Key Policy Metrics from February’s MPC (299th Meeting)
At its previous meeting held on February 19–20, 2025, the MPC:
- Retained the Monetary Policy Rate (MPR) at 27.50%
- Maintained the asymmetric corridor around the MPR at +500/-100 basis points
- Held the Cash Reserve Ratio (CRR) at 50.00% for Deposit Money Banks and 16.00% for Merchant Banks
- Kept the Liquidity Ratio (LR) unchanged at 30.00%
These decisions were largely supported by improving foreign exchange market stability, as well as a gradual moderation in domestic fuel prices, which helped curb inflationary pressures.
CPI Rebasing and Speculations on Policy Direction
Earlier speculation about the second quarter MPC dates had lingered due to delays by the National Bureau of Statistics (NBS) in releasing its rebased Consumer Price Index (CPI). However, with the updated CPI data now available, attention has shifted firmly to the MPC’s likely policy direction.
Notably, the rebased CPI had also influenced deliberations at the 299th meeting in Q1 2025, reinforcing the CBN’s cautious approach in managing inflation without stifling economic activity.
Will the CBN Hold or Hike?
As today’s meeting begins, analysts and economists are split on whether the CBN will hold the MPR steady or initiate another rate hike.
Some experts argue that the extent of policy tightening implemented since the start of 2024—alongside early signs of economic improvement—may justify a pause in further rate hikes. They suggest that the CBN might adopt a wait-and-see approach, giving room to evaluate the full impact of earlier adjustments.
However, others believe that global inflationary pressures, volatility in oil prices, and domestic fiscal challenges may still necessitate a hawkish stance, at least in the short term.
Conclusion
Today’s 300th MPC meeting stands at a crucial crossroads for Nigeria’s economy. As stakeholders await the committee’s decision, all eyes are on the Central Bank to see whether it will maintain its current policy trajectory or signal a shift in monetary policy strategy.
Either way, the outcome will have far-reaching implications for interest rates, investment decisions, and market confidence in the months ahead.
