CBN Projects Moderation in Inflation, Maintains Key Rates*

 The Central Bank of Nigeria (CBN) has expressed optimism about a gradual drop in inflation rates, citing recent macroeconomic developments that are expected to positively impact price dynamics in the near to medium term.

CBN Governor, Olayemi Cardoso, announced this during a press briefing after the first Monetary Policy Committee (MPC) meeting of 2025.

According to the Governor, “the stability in the foreign exchange market with the resultant appreciation of the exchange rate and the gradual moderation in the price of Premium Motor Spirit (PMS)” are key factors that will drive down inflation.

The CBN has retained the Monetary Policy Rate (MPR) at 27.5%, as well as other key interest rates, in a bid to sustain economic stability.

The Cash Reserve Ratio (CRR) for deposit money banks remains at 50%, while the Liquidity Ratio stays steady at 30%.

Cardoso noted that despite the risks of persisting inflationary pressures driven largely by food prices, the recent rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS) is expected to reflect current consumption patterns.

The apex bank’s governor noted the importance of increased collaboration between the monetary and fiscal authorities, stating that “the benefits of increased collaboration…demonstrated at the recently concluded Monetary Policy Forum organized by the Bank” will help achieve price stability and sustainable growth.

While fielding questions from journalist on the collaboration between monetary and fiscal authorities, Cardoso stressed its critical importance in sustaining recent economic improvements.

He cited the recent Monetary Policy Forum as an example, where stakeholders from the organized private sector, Bureau de Change operators, and government representatives, including the Minister of Finance, participated.

The MPC acknowledged improvements in the external sector, with the convergence of exchange rates between the Nigeria Foreign Exchange Market (NFEM) and Bureau de Change (BDC) operators.

The Committee commended the CBN’s recent measures, such as the Electronic Foreign Exchange Matching System (B-Match) and the Nigeria Foreign Exchange Code, aimed at enhancing transparency and credibility in the forex market.