The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) recently met and reviewed key developments in the global and domestic economies, including the risks to the outlook.
All the twelve (12) members of the Committee were in attendance, thus participating in the review.
The Committee, which was established on October 25, 2005, has the mandate to review periodic global and domestic economic developments and their likely impact on price stability and economic growth.
The Committee also has the responsibility to maintain a broad surveillance of emerging risks and review forecasts of global and domestic price development and output growth, and prepare technical recommendations to the MPC based on their analysis of the impact of these developments.
The current disinflation and growth of the nation’s economy could be largely attributed to the committee’s efforts in sustaining monetary policy tightening, stabilising exchange rate, increasing capital inflows, and surplus current account balance.
Through the committee’s efforts, headline inflation has decelerated (year-on-year) in October 2025, for the 7th consecutive month, supported by the relative stability in the price of Premium Motor Spirit (PMS) and improved food supply, across the country.
At its 303rd meeting held in Abuja on Tuesday, the Committee by a majority vote, retain the Monetary Policy Rate (MPR) at 27.0 per cent, Adjust the Standing Facility corridor around the MPR at +50/-450 basis points, Retain the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and 75.00 per cent for non-TSA public sector deposits, and Keep the Liquidity Ratio unchanged at 30.00 per cent.
The Chairman of the Committee, Mr Olayemi Cardoso, while announcing the decision of the Committee shortly after the meeting, explained that the decision was based on the progress so far made to achieve low and stable inflation in the economy, noting that despite the efforts made, headline inflation remains high at double digit requiring sustained efforts toward moderating it further.
“The Committee was, therefore, of the view that the steady deceleration in inflation across the three measures (headline, core and food) in October 2025, suggests that the lagged impact of previous tight policy measures is expected to continue in the near term. Thus, maintaining the current stance of policy, amidst lingering global uncertainties, would allow the effect of previous policy rate hikes to sufficiently transmit to the real economy and further reduce prices,” he added.
The Committee, according to him, 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.
The MPC also commended the collaborative effort of both the fiscal and monetary authorities, which led to the recent upgrade of Nigeria’s sovereign credit rating by major rating agencies, and the delisting of the country from the FATF grey list.
Members acknowledged that these positive developments would further boost investor confidence and improve capital flows to the economy.
Cardoso said the Committee noted with satisfaction, the sustained resilience of the banking system, with most financial soundness indicators remaining within regulatory thresholds.
He said the Members also acknowledged the substantial progress in the ongoing recapitalization programme, with sixteen (16) banks achieving full compliance with the revised capital requirements, thus, urged the Bank to ensure a successful implementation and conclusion of the programme.
PRICE AND OTHER DOMESTIC DEVELOPMENTS
The Committee reviewed the headline inflation rate which declined (year-on-year) to 16.05 per cent in October 2025, from 18.02 per cent in September, driven by a moderation in both food and core inflation.
It also reviewed food inflation which fell significantly to 13.12 per cent in October 2025 from 16.87 per cent in the preceding month, reflecting improved domestic food supply, stable exchange rate and base effect. Similarly, core inflation slowed to 18.69 per cent (year-on-year) in October 2025, from 19.53 per cent in the preceding month, owing largely to a decline in the price of furnishing & household maintenance.
The Committee noted the Real Gross Domestic Product (GDP) for the second quarter of 2025, which sustained its positive trajectory, evidenced by the growth rate of 4.23 per cent (year-on-year), compared with 3.13 per cent in the first quarter of 2025.
In addition, the Purchasing Manager’s Index increased significantly to 56.4 points in November 2025, the highest in the last five years, pointing to a more positive growth outlook for the third and fourth quarters of 2025.
It also reviewed the Gross external reserves increased by 9.19 per cent, reaching a high of US$46.70 billion on November 14, 2025, from US$42.77 billion at end-September 2025, sufficient to cover 10.3.
months of import for goods and services.
GLOBAL DEVELOPMENTS
The Committee, while reviewing the global developments, said the global output was projected to recover in the near to medium term, underpinned by improved trade negotiations, accommodative monetary policy especially in Advanced Economies and easing geopolitical tension. However, headwinds to the outlook include the potential for increasing protectionism, geoeconomic fragmentation and likely resurgence of trade tensions between the US and its major trading partners.
It said that global inflation is expected to maintain a steady decline through 2026, on the back of the combined impact of past monetary tightening, gradual stabilization of the global supply chain and softening commodity prices. Adding that the inflation is projected to remain above pre-Pandemic levels in the near term.
COMMITTEE’S FORECAST
The Committee’s forecast a sustained disinflation in the near term, to be largely
driven by the lagged impact of previous monetary policy tightening measures, supported by
the continued stability in the foreign exchange market.
In addition, it said the ongoing seasonal harvest cycle is expected to boost local food supply, and further moderate food prices.
The Committee reaffirmed commitment to a data driven assessment of developments and outlook to guide future policy decisions.
