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CBN to Hold Its 300th MPC Meeting on May 20 2025

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The Central Bank of Nigeria (CBN) announced on May 14 that its 300th Monetary Policy Committee (MPC) meeting will be held on May 19 & 20, 2025.

The MPC Committee, led by the CBN governor, Olayemi Cardoso, is the bank’s highest policymaking committee.

Established in 1993 to direct the country’s monetary policies, the CBN’s 300th MPC meeting represents over thirty years of continuous monetary policy formulation. The CBN Act 2007 empowers the banks’ MPC Committee to determine Nigeria’s monetary policy parameters to ensure price stability.

The 300th MPC meeting comes at a critical time as the Nigerian economy grapples with inflation and naira volatility in foreign exchange markets.

At every MPC meeting, the committee members analyze various data and determine the benchmark interest rate. They also determine the Cash Reserve Ratio, which is the percentage of bank reserves held with the CBN, and the Liquidity Ratio.

These decisions from the MPC directly affect the Naira’s exchange rate, interest rates on loans & savings, inflation trends, investment flows, and the country’s broader macroeconomic direction.

Consequently, investors (domestic & foreign), financial institutions, and others will closely monitor the Central Bank of Nigeria’s decisions.

The CBN Governor typically chairs the MPC Committee meeting. Other members include four CBN Deputy Governors, two members of the CBN Board of Directors, two representatives from academia, two representatives from the private sector, and one representative from the Ministry of Finance.

Expectations Ahead of the CBN MPC’s May Meeting 

At the last MPC meeting on February 19 and 20, 2025, the Committee retained the monetary policy rate (MPR), which benchmarks interest rates in the country, at 27.5%.

The CBN’s decision to retain the MPR followed a report by the National Bureau of Statistics (NBS) on February 18 that Nigeria’s inflation rate dropped to 24.5% from 34.8%, after rebasing the Consumer Price Index (CPI). The Committee also kept the cash reserve ratio (CRR) at 50% and the liquidity ratio at 30%.

The committee generally assesses local and global economic situations before deciding whether to ease, tighten or maintain the existing monetary policy stance.

The CBN’s MPC meets every two months, meaning there are six regular meetings per year, with emergency sessions possible if needed.

CBN’s Interest Rates Decisions Since February 2024

Date MPR Decision Reason(s)
Feb 27, 2024 Hiked to 22.75% Inflation nearing 30%; naira depreciation; urgent need to curb excess liquidity; restore investor confidence
Mar 26, 2024 Hiked to 24.75% Inflation continued rising above 33%; FX instability; Curb food price inflation
May 21, 2024 Hiked to 26.25% Inflation hit 33.6% in April; excess naira liquidity
Jul 23, 2024 Hiked to 26.75% Inflation reached 34.2% (highest); economic stabilization efforts
Sep 24, 2024 Hiked to 27.25% Persisting inflationary pressures
Nov 25, 2024 Hiked to 27.50% Renewed inflation rise from 32% in June to 33.9% in October; need for price stability
Feb 20, 2025 Held at 27.50% (No change) Inflation fell to 24.48% in January amid CPI rebasing

The big question is whether the CBN will hike, hold, or cut rates.

In March, Nigeria’s inflation rose to 24.23% from 23.18% recorded February. The country’s National Bureau of Statistics, the National Agency responsible for the development and management of official statistics, is set to release Nigeria’s April Consumer Price Index on May 15.

With persistent inflationary pressures and the naira still experiencing volatility, expect the MPC to either maintain or raise rates further to curb inflation and stabilize the currency.

Given the double-digit inflation, the CBN is unlikely to lower interest rates. Nevertheless, a rate hike would lead to higher borrowing costs for businesses and consumers.

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  1. Pingback: CBN Keeps Interest Rate at 27.50%, Cites Inflation Slowdown - Nigeria Oil Digest

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