WorldStage Newsonline– The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) at the end of its latest meeting held the Monetary Policy Rate (MPR) at 27.5%.
Additionally, the Committee retained all other parameters – Cash Reserve Requirement (CRR) for Deposit Money Banks (DMBs) and Merchant Banks at 50.0% and 16.0%, respectively; the asymmetric corridor around the MPR at +500bps/-100bps and the liquidity ratio at 30.0%.
The MPC’s decision was underpinned by the need to anchor inflation expectations and ease the pressure on the naira amid the increased global uncertainty.
On domestic growth, the Committee acknowledged the robust growth recorded in Q4-24 (3.84% y/y vs Q3-24: 3.46% y/y), which was largely driven by strong growth in the services, manufacturing and agricultural sectors, despite the moderation in the oil sector growth.
On inflation it also acknowledged the sustained moderation in food inflation (-53bps to 21.26% y/y).
However, it noted that elevated electricity tariffs and the recent naira depreciation have kept core inflation persistently high, with the rate standing at 23.39% in April.
Nonetheless, the Committee expressed optimism that the relative stability in the exchange rate and the moderation in PMS prices could help ease overall consumer price pressures in the near term.
On external sector, the MPC acknowledged the recent build-up in external reserves, which rose by 2.9% to USD38.90 billion (from USD37.82 billion as of March 31), providing a buffer of over 7.0 months of import cover for goods and services.
Conversely, the balance of payments surplus narrowed to USD1.10 billion in Q4-24, down from USD4.21 billion in Q3-24, largely due to a moderation in the current account surplus.
The Committee also highlighted the CBN’s intensified efforts to curb heightened naira volatility through ongoing market reforms and strategic FX interventions, particularly in the face of persistent global headwinds.
On global development, the Committee underscored the mounting global pressures, largely driven by the United States’ unfavourable trade policies.
Heightened uncertainty, coupled with expectations of increased oil output from OPEC+, has contributed to a moderation in crude oil prices—raising concerns over the potential adverse effects on Nigeria’s fiscal revenues and widening fiscal deficit.
According to the MPC, the global economy is expected to maintain positive growth despite shocks posed by the increased trade tension. This is in line with the IMF’s global growth projection of a 2.8% y/y in 2025 and 3.0% y/y in 2026.
