CBN holds interest rate at 27% to tame inflation

Abuja – The Central Bank of Nigeria (CBN) has decided to maintain its key interest rate at 27%, choosing to let the effects of previous hikes fully work through the economy before considering any cuts.

The announcement was made by CBN Governor Olayemi Cardoso following the final Monetary Policy Committee (MPC) meeting of the year.

The committee voted to retain the Monetary Policy Rate (MPR) at 27%, keep the Cash Reserve Ratio (CRR) for commercial banks at 45%, maintain the Liquidity Ratio at 30%.

Governor Cardoso stated that the decision was driven by the need to continue the progress made in reducing inflation.

He noted that headline inflation has decelerated for seven consecutive months, thanks to factors like monetary policy tightening, a stable exchange rate, and improved food supplies.

However, he emphasized that “headline inflation remains high at double digit, requiring sustained efforts,” suggesting that a rate cut was premature.

On bank recapitalisation, the CBN disclosed that 16 banks have already met its new minimum capital requirements, with a total of 27 banks actively raising capital.

The apex bank also revealed that it has recovered N2 trillion of past intervention funds in the last two years.

However, a significant sum of N4.69 trillion remains outstanding from a total intervention portfolio of N10.93 trillion dating back over a decade.

Cardoso highlighted that this huge outstanding debt is why the CBN cannot launch new intervention programs, as it limits the bank’s ability to support new initiatives.

While holding firm for now, the CBN signaled that if the current trend of cooling inflation continues, it may be poised to begin cutting interest rates in 2026.

About The Author

Dele Fashomi

Dele Fashomi, seasoned journalist and communication teacher, is a holder of Master of Arts degree in Communication and Language Arts from the University of Ibadan in 1992/93.

Earlier, he had bagged a Bachelor degree from the same university in 1984, after which he proceeded to the Nigerian Institute of Journalism, Lagos, in 1990, for a postgraduate diploma in Journalism.

He had done many courses in communication, including the EU-BBC Editing Course in 2002.

Mr. Fashomi combines effectively the practice, research and teaching of communication. And to date, he has published two academic works in communication: Issues in Communication Technology and Policy (2010) and Economic and Social Issues in Advertising and PR (2013).

He had his first break in the Nigerian media in Concord Newspapers in 1990 and today, he has over two and half decades experience earned in several newspapers.

He has been part of many start-ups, such as The Republic (1987), The Comet (1999), The Anchor 2001 – 2002; Sun Newspapers (2003); Westerner newsmagazine (2005 – 2010) as Editor; National Life (2011) as Sunday Editor, and Newswatch Newspapers (2012- 2016) as Daily Editor.

Dele Fashomi is now the Publisher/Editor-in-Chief of Newstide247.com newspaper online, which he started in July 2015. He is also into biography writing, with many books in his trail, some of which he wrote alone and one he co- authored with his mentor, Mr Dare Babarinsa, entitled:  Olabiyi Durojaiye – DARE TO BE DiFFERENT. He also guided and collaborated with Pa Olatunji Odusanya in writing his autobiography – AGAINST ALL ODDS. There are many other books in the works under his pen.

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