CBN 's monetary policy committee opts to keep interest rates fixed at 27.5% for now

MEMBERS of the Central Bank of Nigeria Monetary (CBN) policy committee have decided to keep interest rates at 27.5% and not raise it any further due to signs that inflation appears to be falling.

Over recent years, Nigeria has suffered from the effects of galloping inflation, forcing the CBN to keep raising interest rates. However, according to the National Bureau of Statistics, Nigeria’s headline and food inflation rate dropped to 24.48% and 26.08% in January from 34.80%  and 39.93% in December last year.

As a result, the CBN opted to keep interest rates fixed for January. It also retained the Cash Reserve Ratio at 50 basis points and the liquidity ratio at 30% and the asymmetric corridor at +500/-100 basis points around the monetary policy rate.

CBN governor, Olayemi Cardoso explained that the rate pause was necessary following the recent inflation decline, which dropped to 24.48% in January after the Consumer Price Index rebase. He added: “The members of the monetary policy committee unanimously agreed to retain the interest rate at 27.5%.

This is the first pause in interest rate hikes since Mr Cardoso took office in September 2023 and comes as economists and financial experts have called for an interest rate pause over recent months. Leading these calls has been the Centre for the Promotion of Private Enterprise.