…Retention of lending rate by MPC commendable – Uwaleke
CHIGOZIE NAMADI
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the country’s headline lending rate known as the Monetary Policy Rate (MPR) at 27 per cent.
In a communiqué issued at the end of the 303rd meeting of the MPC on Tuesday, the CBN Governor, Yemi Cardoso, said that members of the committee also voted to retain the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks and 16 per cent for merchant banks.
Cardoso said that the MPC also retained the 75 per cent CRR on non TSA public sector deposits.
“Liquidity Ratio is also retained at 30 per cent, while Standing Facilities Corridor adjusted to +50 / -450 basis points around the MPR,” he said.
He said that all 12 members of the MPC attended the meeting.
According to him, the committee’s decision is underpinned by the need to sustain the progress made so far towards achieving low and stable inflation.
“The MPC reaffirmed its commitment to a data-driven assessment of developments and outlook to guide future policy decisions.
“It welcomed the continued deceleration in headline inflation year-on-year in October for the seventh consecutive month.
“This favourable development resulted from several factors, including sustained monetary policy tightening, stable exchange rate, increased capital flows, and surplus current account balance” he said.
The CBN governor said that the relative stability in the price of Premium Motor Spirit, (PMS), and improved food supply supported the pace of disinflation.
He, however, said that headline inflation remained high at double-digit, requiring sustained efforts towards moderating it further.
“The committee is, therefore, of the view that the steady deceleration in inflation across the three measures, headline, core, and food in October 2025 suggests that the large impact of previous tight policy measures is expected to continue in the near term.
“Maintaining the current stance of policy amid lingering global uncertainties would, thus, allow the effect of previous policy rate hikes to sufficiently transmit to the real economy and further reduce prices.
“Members noted the robust performance of the external sector, evidenced by the surplus current account balance and steady accretion to reserves, which have contributed to stability in the exchange rate and moderation in inflation,” he said.
Also, a financial expert, Prof. Uche Uwaleke, has commended decision of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to retain Monetary Policy Rate (MPR) at 27 per cent.
Uwaleke, the President, Capital Market Academics of Nigeria, gave the commendation in an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja.
NAN reports that the MPC announced retention of the country’s headline lending rate known as MPR at 27 per cent on Tuesday after its 303rd meeting.
In a communiqué issued at the end of the meeting, the CBN Governor, Yemi Cardoso, said that members of the committee also voted to retain the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks and 16 per cent for merchant banks.
Cardoso said that the MPC also retained the 75 per cent CRR on non TSA public sector deposits.
“Liquidity Ratio is also retained at 30 per cent, while Standing Facilities Corridor adjusted to +50 / -450 basis points around the MPR,” he said.
Uwaleke said that the decisions to maintain the MPR at 27 per cent and keeping the CRR and Liquidity Ratio unchanged were a welcome development.
“This is especially so against the backdrop of the narrowing and asymmetry of the standing facility corridor from +250/-250 bps to +50/-450 bps, effectively lowering the ceiling for CBN lending and widening the gap on the deposit end.
“This adjustment signals cautious operational easing, even as headline MPR remains elevated apparently to continue to manage inflation and FX pressure.
“With the CBN’s lending window now cheaper, banks face lower marginal funding costs which should ordinarily reduce interbank volatility and encourage lending to SMEs.
“The real challenge is whether banks will translate this corridor adjustment into actual lower lending rates,” he said.
He said that given fiscal pressures from deficit financing which compound inflation risk and the need to support growth, the MPC decision was quite appropriate.
