Nigeria’s Central Bank Maintains 27.50% Interest Rate After CPI Rebasing

Nigeria’s central bank has decided to keep its benchmark interest rate steady at 27.50%, following the recent rebasing of the Consumer Price Index (CPI). This move, announced on Thursday, reflects a cautious approach by the Central Bank of Nigeria (CBN) as it seeks to balance inflation control with economic stability.

The decision was made by the Monetary Policy Committee (MPC), which voted unanimously to maintain the 27.50% interest rate. The committee carefully reviewed key economic factors, including exchange rate trends and slowing fuel price increases, before concluding that holding rates steady was the best course of action. This marks a continuation of the CBN’s strategy to stabilize Nigeria’s economy without adding pressure to businesses or consumers.

Governor Olayemi Cardoso explained that the recent CPI rebasing by the National Bureau of Statistics (NBS) played a significant role in their decision. The rebasing updated how inflation is measured by adjusting the components of the consumption basket to better reflect current spending patterns.

As a result, Nigeria’s inflation rate, which was initially reported at 34.48% in January 2024, dropped to 24.48% under the new methodology. However, despite this statistical adjustment, underlying price pressures remain high in the economy.

The CBN interest rate decision comes at a time when inflation is still a major concern for Nigerians. While the rebased CPI suggests some improvement, many businesses and households continue to face rising costs, particularly for food and imported goods.

Analysts believe that the central bank’s move to maintain its 27.50% interest rate is a signal that it wants more time to evaluate the full impact of previous rate hikes and the rebased inflation numbers before making any major changes.

According to Basil Abia, an economist at Veriv Africa, “Inflation is at an inflection point but could pick up again in a few months. The MPC will likely wait for at least three more months to assess the rebased numbers before making a major move.” This cautious stance reflects concerns that further tightening could hurt business activity, while cutting rates too soon might worsen inflationary pressures.

Since early 2024, Nigeria’s central bank has been aggressively raising interest rates in an effort to control inflation and stabilize the naira. By maintaining its current stance, the CBN appears to be taking a pause to assess how these measures are affecting the broader economy. The decision also highlights Governor Cardoso’s focus on rebuilding investor confidence while addressing domestic economic challenges.

The next MPC meeting is scheduled for May 2025, and investors will be closely monitoring whether Nigeria’s central bank maintains its hawkish tone or begins signaling a shift toward easing if inflation continues to moderate. For now, however, the CBN interest rate remains firmly at 27.50%, reflecting its commitment to stability in uncertain times.

As Nigeria’s central bank has chosen not to adjust its benchmark interest rate after the CPI rebasing, keeping it steady at 27.50%. This cautious approach underscores its efforts to manage inflation while supporting economic recovery. As businesses and consumers navigate rising costs, all eyes will remain on future policy decisions from the CBN and their impact on Nigeria’s economic outlook.

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