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CBN Holds Interest Rate Steady at 27% as It Aims to Boost Economic Recovery
The Central Bank of Nigeria (CBN) has decided to keep the interest rate, or the monetary policy rate (MPR), steady at 27%. This move is part of the bank’s plan to help the economy recover, control inflation, and keep the foreign exchange market stable.
At Tuesday’s 303rd Monetary Policy Committee (MPC) meeting, CBN Governor Olayemi Cardoso explained that the decision to hold the interest rate steady comes from the bank’s aim to maintain a tight monetary policy for now. Back in September, the CBN lowered the MPR slightly, from 27.5% to 27%, marking the first cut since the post-COVID times. But this time around, the committee felt things aren’t yet stable enough to drop the rate any further.
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Cardoso shared that the majority of the committee members agreed to keep things as they are. Since the MPR acts as the base interest rate for the whole economy, the CBN keeping it steady means other rates will also stay generally high. This helps the bank push its strategies to control rising prices and build confidence among investors.
Even though inflation has been dropping steadily, many thought the interest rate might be lowered more. In fact, since Cardoso took charge with a strict policy stance, the bank seems to be playing it cautious when it comes to changing rates, despite the pressures from the economy.
Looking at the numbers, inflation dropped for the seventh month in a row, hitting 16.05% in October 2025, down from 18.02% in September and 20.12% in August. This is quite a shift compared to last year, when both inflation and interest rates were much higher.
Besides holding the MPR at 27%, the CBN also changed the corridor around the rate, setting it between +50% and -450%, compared to +250% and -250% back in September. Other key monetary tools stayed the same, like the Cash Reserve Ratio—45% for Deposit Money Banks and 16% for Merchant Banks—and the Liquidity Ratio stayed fixed at 30%.
It’s worth remembering that the last time the interest rate was cut was in September 2020, when it dropped from 12.5% to 11.5% to help Nigeria’s economy weather the COVID-19 crisis.
By holding the interest rate steady at 27%, the CBN is showing its commitment to boosting economic recovery while keeping inflation under control. Even though inflation has fallen twice since the last MPC meeting, the decision to keep the rate fixed shows the bank’s careful and flexible approach to the country’s economic health.
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For Nigerians, this steady interest rate brings both good and tricky news. On one hand, it means the environment is right for businesses to grow as people have better spending power. On the other hand, it highlights how unpredictable economic decisions can be, as the MPC carefully weighs each move.
If the current downward trend in inflation continues, though, we may see the interest rate go down in the near future.
So, by holding the interest rate steady at 27%, the CBN is striking a balance between supporting recovery and staying cautious, hoping to keep Nigeria’s economy on the right track.
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