Date: Tuesday, 22nd July 2025
Ref: CBN/MPC/COM/158/301
Attention: News Editors/Gentlemen of the Press

MONETARY POLICY RATE RETAINED AT 27.50 PER CENT

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN)
held its 301st meeting on July 21 and 22, 2025 to review recent economic and
financial developments and the outlook. All twelve (12) members of the
Committee were in attendance.

Decision of the MPC
The Committee decided to maintain the current monetary policy stance and
hold all policy parameters constant as follows:
1. Retain the Monetary Policy Rate (MPR) at 27.50 per cent.
2. Maintain the asymmetric corridor around the MPR at +500/-100 basis
points.
3. Retain the Cash Reserve Ratio (CRR) for Deposit Money Banks at 50.00
per cent and for Merchant Banks at 16.00 per cent.
4. Keep the Liquidity Ratio unchanged at 30.00 per cent.
This decision was premised on the need to sustain the momentum of
disinflation and sufficiently contain price pressures. Maintaining the current
policy stance will continue to address the existing and emerging inflationary
pressure. The MPC will continue to undertake rigorous assessment of
economic conditions, price development and outlook to inform future policy
decisions.

Considerations
The Committee acknowledged the decline in headline inflation in June 2025,
the third consecutive month of deceleration. This was largely driven by the
moderation in energy prices and stability in the foreign exchange market.
Despite these positive developments, Members observed the uptick in
month-on-month headline inflation, suggesting the persistence of underlying
price pressures. The continued global uncertainties associated with the tariff
wars and geopolitical tensions could further exacerbate supply chain
disruption and exert pressure on the prices of imported items.
Members also noted the continued stability in the banking system, evidenced
by the stable Financial Soundness Indicators (FSIs) which would further be
supported by the on-going banking recapitalisation exercise. The MPC noted
that eight (8) banks have fully met the recapitalisation requirements, while
others are making progress towards meeting the deadline. The Committee
thus, urged the Management of the Bank to sustain its oversight of the
banking system to ensure continued resilience, safety and soundness of the
financial system.
Price and Other Domestic Developments
Headline inflation (year-on-year) declined to 22.22 per cent in June 2025 from
22.97 per cent in May, primarily driven by the moderation in energy prices,
especially cooking gas, wood charcoal and diesel. Food inflation (year-onyear), however, rose to 21.97 per cent in June 2025 from 21.14 per cent in
May, attributed mainly to the increase in the cost of processed food. Core
inflation, that is, all items less farm produce and energy, also increased to
22.76 per cent in June 2025 from 22.28 per cent in May, reflecting an uptick in
the cost of Information & Communication, Housing & Utilities, and Personal
Care & Social Services.
On a month-on-month basis, headline inflation rose to 1.68 per cent from 1.53
per cent, largely due to increases in the price of services and imported food.
The Committee acknowledged the efforts of the Federal Government in
improving security and its impact on food production. Members thus urged
the government to continue its support towards timely provision of high-yield
seedlings, fertilizers, and other critical inputs for the current farming season.
The MPC also noted the sustained stability in the foreign exchange market,
accentuated by improved capital flows, earnings from increased crude oil
production, rising non-oil exports and significant reduction in aggregate
imports.

Real GDP in the first quarter of 2025 grew by 3.13 per cent compared with
2.27 and 3.38 per cent in the corresponding and preceding quarters of 2024,
respectively. In addition, recent data on the Purchasing Managers Index
indicates that the Nigerian economy remains on an expansionary path. The
external sector also remains stable and resilient despite persisting
uncertainties in the global macroeconomic environment. Gross external
reserves rose to US$40.11 billion on July 18, 2025, representing about 9.5
months of import cover for goods.
Global Developments
Available projections suggest that global output recovery continues at a
gradual pace. However, recent developments, especially the persistent tariff
war and geopolitical tensions, may continue to disrupt supply chains and
exert upward pressure on the prices of imports.
Disinflation in the Advanced Economies has slowed, prompting major central
banks to be cautious of upside risks to inflation. In the Emerging Markets,
central banks continue to calibrate monetary policy to their domestic
conditions, noting the persisting risks to inflationary pressures.
Outlook
Staff projections indicate a further decline in inflation in the coming months,
underpinned by the current tight monetary policy stance, stable exchange
rate, declining PMS prices, and moderation in food prices as the harvest
season approaches.
Given the persistent uncertainty in the policy environment and underlying
price pressures, monetary policy will need to maintain its current stance until
risks to inflation recede sufficiently. The Committee remains committed to the
Bank’s price stability mandate and would take appropriate measures to
foster stability and confidence in the economy.
The next meeting of the Committee is scheduled for Monday, 22nd and
Tuesday, 23rd September 2025.
Thank you.
Olayemi Cardoso
Governor,
Central Bank of Nigeria
July 22, 2025.

PERSONAL STATEMENTS BY
THE MONETARY POLICY COMMITTEE MEMBERS
MPC MEETING JULY 21 – 22, 2025

1. AKU PAULINE ODINKEMELU
I vote to retain the Monetary Policy Rate (MPR) at 27.50 per cent, the
asymmetric corridor around the MPR at +500/-100 basis points, Cash Reserve
Ratio of Deposit Money Banks at 45.00 per cent and Merchant Banks at 16
per cent, and the Liquidity Ratio at 30.00 per cent. My decision is influenced
by the following developments:
Economic and Financial Developments
Since the May 2025 meeting, global economic conditions have shown little
meaningful improvement. Growth prospects remain subdued by persistent
geopolitical tensions, particularly, in the Middle East and the ongoing RussiaUkraine conflict, alongside policy uncertainty, tight financial conditions, and
escalating trade restrictions. Notably, the U.S. and its major trading partners
have imposed tariffs on critical sectors, pushing global tariff rates to historic
highs, as highlighted in the IMF’s April 2025 World Economic Outlook. Trade
wars, particularly through tariff hikes, act as a negative supply shock that
could reduce aggregate productivity by distorting resource allocation. While
the latest round of scheduled tariffs is currently paused, the existing measures
are expected to dampen global output.
The IMF projects global growth to slow from 3.3 per cent in 2024 to 2.8 per
cent in 2025 before a modest recovery to 3.0 per cent in 2026. The Advanced
economies will bear the brunt of this slowdown, with growth declining from
1.8 per cent in 2024 to 1.4 per cent in 2025 and 1.5 per cent in 2026. Growths
in the emerging markets and developing economies (EMDEs) are also
expected to moderate, from 4.3 per cent in 2024 to 3.7 per cent in 2025 and
3.9 per cent in 2026. Sub-Saharan Africa’s growth has been revised
downward to 3.8 per cent in 2025 (from 4.0 per cent in 2024), with a tentative
rebound to 4.2 per cent in 2026. These challenges underscore the urgent
need for coordinated multilateral efforts to address trade restrictions and
geopolitical instability. However, progress has been slow, with policy
responses remaining either passive or ineffective.
Global inflation is expected to continue its downward trajectory, converging
toward advanced-economy central banks’ target (2.2 per cent by 2026),
supported by easing supply chain disruptions, lower energy prices, and labor

market normalization. The IMF forecasts global inflation to decline from 5.7
per cent in 2024 to 4.3 per cent in 2025 and 3.6 per cent in 2026, though
slightly higher than January 2025 projections due to persistent upside risks. In
the advanced economies, inflation is projected to ease from 2.6 per cent in
2024 to 2.5 per cent in 2025 and 2.2 per cent in 2026. Given lingering
inflationary concerns, the U.S. Federal Reserve has paused its easing cycle.
Meanwhile, EMDE inflation is expected to decline from 7.7 per cent in 2024 to
5.5 per cent in 2025 and 4.6 per cent in 2026, though risks remain elevated
due to exchange rate pressures, infrastructure gaps, energy shortages,
geopolitical tensions, and climate-related shocks, as previously noted in May
2025.
DOMESTIC DEVELOPMENTS
At the domestic level, the Nigerian economy grew by 3.84 per cent (year-onyear) in Q4 2024, up from 3.46 per cent in the previous quarter. This expansion
was driven by robust performance in the services sector (particularly financial
& insurance, transport & storage, and information and communication),
alongside steady contributions from industry and agriculture. While growth
remains positive, it continues to face fragility risks, including subdued
consumer demand and elevated interest rates, which could constrain
economic momentum.
Inflation (year-on-year) eased slightly to 22.22 per cent in June 2025, down
from 22.97 per cent in May, primarily due to moderating prices of farm
produce and energy. However, core inflation, which excludes volatile food
and energy prices, rose to 22.76 per cent (from 22.28 per cent in May),
fuelled by increased costs in transport and ICT services. This divergence
highlights persistent underlying inflationary pressures, even as some
commodity prices show temporary relief.
Rationale for Vote
Given these dynamics, I vote to maintain the current interest rate while urging
the Bank to closely monitor the potential spillover effects of trade tensions on
the domestic economy, particularly, regarding trade costs and inflationary
pressures. The declining domestic inflation and stable exchange rate has
afforded the Bank the rare privilege of effectively anchoring inflation
expectation and promoting price stability during this period of heightened
global uncertainty.
1. Policy Implications and Outlook
Domestic inflation is expected to continue its downward trajectory,
supported by the extended 150-day tariff exemption for staple grain imports,
improved security conditions enabling better access to key farming

communities, favorable economic conditions, exchange rate stability, and
relatively stable PMS prices. This positive trend offers a critical opportunity to
reinforce and accelerate disinflationary momentum. However, significant
upside risks persist, including potential geopolitical disruptions to crude oil
markets, recent and prospective increases in diesel prices and electricity
tariffs, the threat of renewed insecurity in agricultural communities, adverse
weather events such as flooding, and inflationary spillovers from global trade
tensions.
2. Conclusion
Given this delicate balance between progress and vulnerability, enhanced
coordination between monetary and fiscal authorities remains imperative to
develop sustained solutions for food price stability. The current environment
demands urgent, decisive policy action to stimulate domestic agricultural
production - the most effective long-term measure for sustaining lower food
prices. Proactive measures to address these risks now will be crucial for
consolidating recent gains and anchoring inflation expectations moving
forward.

2. ALOYSIUS UCHE ORDU
Introduction
I voted to maintain all the MPC parameters at their current levels:
• Maintain Monetary Policy Rate (MPR) at 27.50 percent,
• Maintain Asymmetric corridor around the MPR at +500/-100 basis
points,
• Maintain Cash Reserve Ratio (CRR) for Deposit Money Banks at 50
percent and for Merchant Banks at 16 percent, and
• Maintain the Liquidity Ratio unchanged at 30 percent.

Developments in the global economy
The July 2025 MPC meeting took place at a time of increased challenge to
the status of the US as a “safe haven” resulting from the US trade war, the
rising fiscal deficit and the attacks on the independence of the US Federal
Reserve. Consequently, there has been a simultaneous decline in the value
of the dollar and US Treasury prices. Not since the early 1970s has the dollar
had such a worst start to the year: Its strength vis-à-vis major rival currencies
dropped in the last six months.
Usually, the dollar would appreciate during a crisis as funds from advanced
and emerging market economies pour into the US on account of its safehaven status, and partly due to the depth of the US Treasury market. The
recent unusual depreciation of the dollar and rising US Treasury yields is
prompting fresh scrutiny on whether the US might be losing its traditional safehaven status.
As investors seek safer havens, the euro rose by around 14 percent to USD1.18
earlier in July. This appreciation contrasts sharply with previous predictions of
euro-dollar parity earlier this year. If the euro appreciation persists, the ECB
may likely cut interest rates further to dampen the effects on inflation and the
euro area economy. Already, the ECB has lowered borrowing costs to 2
percent compared to the Fed’s 4.25 - 4.50 percent. Yet, the euro has
strengthened, signaling, perhaps, further erosion of trust in the dollar.
There are clearly reasons to be concerned about the US’s haven status. The
lack of political will to rein in the US budget deficit is evident in the ‘One Big
Beautiful Bill Act’ signed into law on July 4th. The Act will add over USD3 trillion
to the deficit over ten years. (Currently, US debt amounts to around USD36
trillion, about 120 percent of GDP.) And President Trump’s continuing attacks
on the Fed’s independence has not receded.

These concerns may be overstated. As indicated, US Treasuries have
consistently acted as a buffer during periods of uncertainty. Even with recent
volatility, they continue to provide protection, averaging positive returns
during equity market pullbacks. Similarly, despite a 9% year-to-date drop in
the dollar, its global dominance remains intact, with over 50% of SWIFT
payments and nearly 60% of global reserves still denominated in dollars, an
“exorbitant privilege” vis-à-vis the other 150 currencies used the world over.
At present, no other market rivals the size, liquidity, or influence of the US
Treasury market, which is estimated at USD28.5 trillion and trades over $1
trillion daily. Concerns about foreign selling are not substantiated by recent
data, and foreign holdings have continued to grow despite shifting shares.
While Japan and China remain top holders, fears that Treasuries might be
‘weaponized’ seem exaggerated. The sharp rise in US Treasury yields suggest
temporary, not structural, vulnerability. The dollar’s embedded role in global
finance thus suggests that an imminent reserve status loss – a wholesale shift
to an alternative is highly unlikely for the time being.
Thus, while fiscal challenges and geopolitical shifts have created short-term
uncertainty, the fundamentals underpinning US safe-haven status remain
strong. Treasuries and the dollar may wobble in moments such as the current
policy stress, but they remain unmatched globally. This outcome clearly has
implications for advanced and emerging market economies. The weaker
dollar will likely mitigate the impact of tariffs, resulting in less damage to the
global economy. For emerging market economies such as Nigeria with dollardenominated debt, the depreciation makes it cheaper to service
international financial obligations.
Developments in the domestic economy
Inflation: CBN staff presentations show that inflation has continued to trend
downwards since the last meeting in May. Headline inflation (year-on-year)
declined to 22.22 percent in June 2025 from 22.9 percent in the preceding
month. Farm produce and energy accounted significantly for the observed
decline. However, both core inflation and food inflation recorded increases
to 22.76 percent and 21.97 percent, respectively. By States, Zamfara
accounted for the lowest recorded headline inflation versus Borno where
security continued to keep prices elevated.
As regards inflation expectations, the May 2025 survey showed that
businesses are more optimistic about the level of inflation in the next six
months compared to households. Energy costs, exchange rate, interest rates,
transportation costs and insecurity were the key drivers of inflation
expectations. Overall, the outlook for July 2025 shows a further moderation to

21.62 percent, due to the continued strengthening of the naira among other
factors.
Money supply: The monetary base continued to reflect CBN’s tightening
policy stance with a moderation of the currency in circulation. Also, capital
market developments suggest improved transmission of monetary policy in
the system, and investors’ appetite for Nigerian Treasury bills was sustained.
External sector: In the external sector, the naira appreciated and the gap
between the official and BDC rates narrowed and remained stable on
account of improved foreign exchange liquidity. Remittances and foreign
portfolio investments remained strong, and these helped to boost external
reserves to USD 40.11 billion as of July 18th2025 - over 9 months of import
cover.
However, inflows of foreign direct investment (FDI) amounted to USD 1 billion
in 2024 according to the United Nations Center on Trade and Development.
This amount is considerably lower than FDI flows to comparable countries --
Indonesia (USD24 billion), India (USD28 billion), Egypt (USD46 billion), and Brazil
(USD59 billion) during the same year.
Clearly, the task of attracting inward investments into Nigeria must not rest on
CBN alone. A whole-of-government approach is urgently needed, including
the Ministries of Trade and Industry, Solid Minerals, Digital Economy, Finance,
Planning, Agriculture, etc., and Security Agencies to attract long-lasting FDI to
boost economic growth and create jobs for the country’s burgeoning
population of unemployed youths. Such a coordinated effort to improve the
investment climate will make it easier to raise Nigeria’s economic size to a
trillion-dollar economy in future.
Fiscal developments. The assumptions underpinning the 2025 FGN budget
include crude oil production of 2.06 million barrels per day, crude oil price of
USD75 per barrel, exchange rate of naira 1,500 per USD, GDP growth of 4.6
percent, and inflation of 15 percent. These optimistic assumptions warrant
continued close monitoring in the light of current developments in the global
and domestic economy. Already, revenues and expenditures fell short of
targets for the period March 2024 to March 2025.
The IMF’s 2025 assessment of Nigeria’s fiscal forecasting highlighted persistent
inaccuracies in the budget projections from 2011 to 2023. The report
identified a consistent optimism bias in revenue forecasts, especially for oil
revenues, driven by unrealistic assumptions about oil production rather than
price. Despite the use of conservative oil price benchmarks, actual
production often fell short due to technical constraints, security issues, and

unbudgeted fuel subsidies. Non-oil revenues were also overestimated,
hampered by weak collection systems and administrative inefficiencies.
On the expenditure side, capital spending was systematically over-projected,
with frequent under-execution caused by capacity constraints within
Ministries, Departments, and Agencies. Recurrent expenditures, while more
accurately forecasted, were often compressed in response to revenue
shortfalls, helping to keep fiscal deficit errors relatively contained.
Efforts to minimize these fiscal forecast errors by strengthening the macrofiscal
forecasting
unit,
conducting
and
publishing
regular
forecast
performance reviews, and fostering political commitment to credible
budgeting will greatly improve the credibility of FGN’s budget.
Rationale for my Vote
Overall, the period May to July 2025 recorded some noteworthy
accomplishments. Headline inflation declined to 22.22 percent in June – the
third consecutive month of decline. The purchasing managers’ index rose to
52.3 index points with the agriculture sector in pole position. Improvements in
the non-oil sector boosted government revenues. The exchange rate
appreciated and the spread between the NFEM and the BDC remained
stable. Improved investor sentiments continued to drive FPI inflows, and
positive assessments by Moody’s rating agency and the IMF Article IV mission
reflect improved external perceptions.
And as indicated at the outset, the notable dent to the safe-haven status of
the US will benefit emerging markets, including Nigeria, in terms of increased
capital flows and servicing of dollar-denominated debt. But subdued global
growth could depress the price of crude oil and other commodities.
Nigeria is thus not out of the woods yet. I continue to believe that our current
tight monetary policy stance remains valid to rein in inflation. There is no such
thing as double-digit and stable inflation.
Our tightening stance is thus warranted for as long as it takes until inflation
expectation is well anchored.
Attaining low inflation will help to restore trust in the Naira and deepen
Nigeria’s domestic capital market. It will broaden the market for government
debt, allowing the Federal Government to place public debt without having
to tap dollar markets. Further, a deeper domestic capital market will make it
easier for producers of non-traded goods, whose revenues are in Naira, to
borrow in Naira instead of dollars, which will reduce Nigeria’s overall foreign
exchange risk.

3. BALA MOH’D BELLO MoN
Introduction
At the last two Monetary Policy Committee (MPC) meetings, I voted to retain
the stance of monetary policy by holding all parameters at existing levels. The
positive output trajectory, stable exchange rate, decelerating inflation and
the need to allow previous policy measures to fully transmit through the
economy, are some of the compelling reasons to retain the same stance. I,
therefore, vote to retain all policy parameters at the July 2025 MPC meeting,
as follows.
1. Retain the Monetary Policy Rate (MPR) at 27.50 per cent.
2. Retain the asymmetric corridor around the MPR at +500/-100 basis
points.
3. Retain the Cash Reserve Ratio of Deposit Money Banks at 50.00 per
cent and Merchant Banks at 16 per cent.
4. Retain the Liquidity Ratio at 30.00 per cent.
Rationale
As the second half of 2025 unfolds, it has become increasingly evident that
despite several global headwinds, including uncertain tariff regimes,
persistent geopolitical tensions and rising debt levels, the likelihood of a
global recession is diminishing, contrary to earlier projections by some
analysts. The International Monetary Fund (IMF) currently forecasts global
output growth of 2.8 per cent in 2025 and a moderate improvement to 3.0
per cent in 2026. This optimistic outlook though modest, underscores the
critical role of sustained and coordinated policy interventions by both
monetary and fiscal authorities. These interventions, whether orthodox or
unconventional, often involve complex trade-offs but remain necessary to
support global economic resilience.
Nonetheless, prevailing global policy uncertainties present the need for
balanced and consistent policies to ensure that the seeming economic
resilience is sustained in view of country specific vulnerabilities. These global
dynamics, in conjunction with domestic data and developments, informed
my policy decision at the July 2025 MPC meeting.
Domestic Economic Developments
Reflecting on recent developments, I am encouraged by the impact of prior
MPC decisions, some of which were difficult but essential, as well as
complementary fiscal initiatives that have strengthened the Nigerian

economy. The positive outcomes of these actions are becoming increasingly
evident.
Headline inflation (year-on-year) declined for the third consecutive month to
22.22 per cent in June 2025 from 22.97 per cent in May, primarily driven by the
moderation in energy prices, especially cooking gas, wood charcoal and
diesel. Food inflation (year-on-year), however, rose to 21.97 per cent in June
2025 from 21.14 per cent in May, attributed mainly to the increase in the cost
of processed food. Core inflation, that is, all items less farm produce and
energy, also increased to 22.76 per cent in June 2025 from 22.28 per cent in
May, reflecting an uptick in the cost of Information & Communication,
Housing & Utilities, and Personal Care & Social Services. On a month-onmonth basis, headline inflation rose to 1.68 per cent from 1.53 per cent,
largely due to increases in the price of services and imported food.
Despite these movements, underlying inflationary pressure continues to ease,
supported by monetary tightening, relative exchange rate stability and the
Federal Government’s effort to improve the security situation and thereby
boost food production. Forecasts, indicate that headline inflation is expected
to remain dampened over the medium-term.
The improved security situation is also reflected in the overall economic
performance with the real GDP growing at 3.13 per cent in the first quarter of
2025 compared with 2.27 and 3.38 per cent in the corresponding and
preceding quarters of 2024, respectively.
In the external sector, the naira exchange rate has remained relatively
stable, reflecting the benefits of tighter liquidity conditions, increased investor
confidence, and the effective implementation of recent adjustments to the
foreign exchange (FX) management framework. Speculative activities in the
FX market have declined significantly, fostering greater transparency and
promoting market-based price discovery. This stability is expected to persist
over the medium term, supported by rising external reserves which stood at
US$40.11 billion as of July 18, 2025, equivalent to approximately 9.5 months of
import cover.
The domestic financial system remains sound and resilient. Available data
indicate that key prudential indicators remain largely within regulatory
thresholds. Stress test results presented at the meeting also confirm the
robustness of the banking system, even amidst a contractionary stance of
monetary policy. The Central Bank remains vigilant and proactive, with
initiatives such as the ongoing recapitalization of commercial banks designed
to
reinforce
financial
system
stability
in
an
increasingly
dynamic
macroeconomic environment.

Concluding Remarks
Overall, the short-to-medium term outlook for the Nigerian economy remains
positive with key macroeconomic indicators depicting stability. Nonetheless,
sustained implementation of coordinated and well-balanced policy
measures are imperative to further strengthen macroeconomic fundamentals
in view of persistent global headwinds. Indeed, ongoing trade tensions,
persistent conflicts in the Middle East and Ukraine, and climate related shocks
have implications for emerging markets. Nigeria is not immune to these risks.
Therefore, preserving the gains of the previous months and strengthening
economic fundamentals remains a priority for monetary policy in my view.

4. BANDELE A.G. AMOO
In view of the recent empirical developments in both the domestic and
external economies, I hereby vote as follows:
(a)
Retain the Monetary Policy Rate (MPR) at 27.50 per cent.
(b)
Retain the asymmetric corridor around the MPR at +500/-
100 basis points.
(c)
Retain the Cash Reserve Ratio (CRR) at 50.0 per cent for
Deposit Money Banks (DMBs) and 16.0 per cent for Merchant
Banks.
(d)
Retain the Liquidity Ratio (LR) at 30.00 per cent.
My decision was influenced by the following considerations.
1.
Global Economic Developments
The global environment remains uncertain due to the tainted economic
outlook in the United States arising from its trade and fiscal policies and their
effects on the world economy generally. However, the resilience witnessed
within the major economies in the recent past continued.
Consequently, the behaviour and the volatility of different asset classes have
been impacted, thereby altering global financial and economic conditions.
To address these scenarios, many emerging economies exercised lots of
caution amidst escalation of existing geopolitical tensions, high global interest
rates, and trade frictions from the current tariff war.
Despite the prevailing global uncertainty, however, policy response from
central banks across the world has been mixed. While many opted for a
cautious accommodative approach by loosening policy rates, others held
onto their previous positions. For Nigeria, likely impact of the global economic
development uncertainty may include decline in fiscal revenue and space;
decreased demand for Nigerian exports; rise in capital outflows; reduced
capital inflows and high debt overhang.
2.
Domestic Macroeconomic Developments and Outlook
Domestically, economic growth continued to be moderate as expected.
Following a rebasing of the Nigeria’s national accounts to 2019 prices, the
National Bureau of
Statistics (NBS) reported a 3.13 percent year-on-year real GDP growth in Q1
2025, a notable increase from 2.27 percent in Q1 2024. The nominal GDP also
rose to N94.05trillion.

Headline inflation has declined consecutively in the last three months by 2.84
percentage points to 22.22 percent in June 2025, reflecting a slight decrease
from the preceding month - with food inflation at 21.97 percent and core
inflation at 22.76 percent. However, month on month inflation showed an
uptick in June 2025 (1.68%) when compared to its May 2025 level (1.53%)
indicating persistence of some sectoral factors. A confluence of factors,
including reduction in petroleum pump prices, tight monetary policy stance,
poverty reduction measures implemented by the government, continued
liquidity sterilization efforts, favourable harvest, minimal flood incidence have
supported the gradual deceleration in inflation. Other remote factors include
improved security around the farming communities, moderation in transport
cost, as well as slowdown in processed food imports.
The banking sector performance is adjudged to be relatively stable, strong
and resilient. The Central Bank of Nigeria continues to optimize its pro-market
monetary operations to support effective monetary policy transmission
through adequate regulation. Total bank assets, deposits and credit
recorded amiable growth as at the end of June 2025 relative to June 2024.
The Capital Adequacy Ratio (CAR) and Liquidity Ratio decreased marginally
to 13.43 and 52.69 percents in June 2025, respectively, compared to their
levels in 2024, due to their strong performance in earlier months.
The latest banking industry stability index trend indicates industry resilience
against various risks, supported by efficient macro-prudential framework as
the CBN continue to strengthen synergy with other regulatory entities in the
financial sector. Overall, the financial soundness indicators (FSI) trend for
both banks and other financial institutions showed strong safety levels in terms
of asset growth, solvency, liquidity, profitability and service efficiency.
The improved sector performances in the Nigerian economy engendered
positive investor sentiments. Naira continues to strengthen at the official
window while holiday dollar demand weighs on the sentiment of the parallel
market. As of June 2025, the Nigerian equities market remains bullish, with the
NGX All-Share Index up 5.07 percent. This feat emphasized strong investor
appetite for domestic equities especially in sound corporate stocks
stimulated by impressive dividend pay-out by blue-chip companies. Also,
the Eurobond market may benefit from continued global demand for high
yield emerging market debt. In the medium term, we expect the bearish
prevailing trend to persist, as investors continue to realign their portfolios as
situation unfold in monetary, fiscal and macroeconomic developments –
specifically Nigeria’s new rebased GDP numbers.
The external sector performance continued to improve, driven mainly by
stable crude oil prices and increased production volumes, as well as high
remittance inflows, helping to build more reserves. Nigeria’s Balance of

Payments (BOP) position remains stable to support our external sector
stability. Portfolio inflows remain high, recording positive net inflows as at endJune 2025. The exchange rate has remained broadly stable with some minor
upside and downside movements. External reserves stood at US$40.11 billion
at mid-July 2025, from US$39.01billion at mid-May 2025, mainly, due to
improved crude oil production and stability in the FX market arising from the
Bank’s on-going policy reforms. Other factors include reduction in import
demand pressures arising from the full deregulation of the downstream oil
sector, reduced petroleum products importation regime, increased non-oil
export inflows and other subsisting measures deployed by the CBN.
The commitment of the government to improvements in basic infrastructure,
managed fiscal balance, provision of energy and electricity stock, social
safety programme and poverty reduction, security upgrade, efficient
management of domestic and foreign debt levels will continue to moderate
inflation trends. Special attention must be given to more renewable energy
sources like solar, wind, and hydroelectric power sources to raise productivity
in all sectors. Lower energy prices would help to fasten the disinflationary
process and further facilitate monetary policy easing soon.
3.
My Concern
It’s gladdening to note that the positive macro-economic developments
witnessed in the Nigerian economy in recent time across different sectors
continued in July 2025. Some of them include: sector-wide drop in general
prices, especially food; stability in the foreign exchange market resulting in
reduced speculative activities; lower premium to the BDC rate; gradual
moderation in price of Premium Motor Spirit (PMS) and AGO; increased policy
support by the state governments; planned recapitalisation of the Bank of
Agriculture; increase in social safety programmes to further boost aggregate
demand to reduce the manufacturers’ outcry of unsold stock pile-up; growth
in the capital market ASI and equity portfolios; improved payment system
infrastructure as well as improved coordination between the fiscal and
monetary policy authorities. Nevertheless, the economic stability engendered
by the reforms implemented so far must be supported by reinstating Nigeria’s
import substitution strategies which will take the economy to higher growth
path by boosting our industrial productivity across sectors.
Given the above-mentioned, it is my fervent believe that the MPC actions will
continue to contain demand-side pressures and moderate the second-round
effects coming from supply shocks. I still submit that the current policy rates
remain appropriate to maintain a tight monetary stance until a significant
and sustained decline in inflation is achieved. Working with the MPC team,
the duration and extent of monetary policy restrictiveness will be monitored,
and it must be outcome-dependent, and data driven. As inflation becomes

firmly anchored, the MPC will reassess the possibility for a gradual easing of
the current policy stance.
4.
Conclusion
The ongoing positive innovations and outcomes affirm that Nigeria is
gradually regaining its economic footing. Sustenance of the ongoing
structural economic reforms are vital to unlocking fiscal space, promoting
industrial productivity, moderating debt vulnerabilities, and engendering
inclusive growth.

5. EMEM USORO
At the Monetary Policy Committee (MPC) held on July 21 – 22, 2025, I voted to:
i. Retain the MPR at 27.50%
ii. Retain the Asymmetric Corridor at +500/-100 basis points around the MPR.
iii. Retain the CRR at 50% for commercial banks and 16% for merchant banks;
and
iv. Retain the LR at 30.0%.
This decision reflects my conviction that the Nigerian economy is navigating a
delicate but promising transition from macroeconomic turbulence to relative
stability. Thus, the gains made so far must be firmly consolidated prior to any
consideration of policy easing.
Recent domestic indicators highlight a cautiously optimistic trajectory. For
instance, headline inflation continued its downward trend for the third
consecutive month. This development has been supported by a combination
of factors: seasonal improvements in food supply, the easing of energy costs
following increased domestic refining capacity, and the relative appreciation
of the naira in the official markets.
Exchange rate movements have been notably encouraging, underpinned by
higher FX turnover in the market, reforms aimed at enhancing price discovery
and transparency, and growing investor confidence anchored by rising
external reserves.
The interplay between exchange rate stability, broad money growth and
disinflation has been particularly important in reducing pass-through effects,
and this in turn is reinforcing inflation expectations among households and
firms. Encouragingly, the deviation of broad money growth (4.98% as at endMay 2025) from its provisional benchmark (15.60%) suggests that monetary
expansion is contained. This development is driven by a contraction in net
domestic credit, alongside tighter reserve money conditions, reflecting the
enduring effects of the cash reserve requirements.
Nonetheless, beneath the headline figures, structural vulnerabilities remain as
food and core inflation continue to be elevated, largely due to longstanding
challenges such as insecurity, inadequate logistics infrastructure, and underinvestment in food processing and distribution systems. Moreover, despite the
headline tightening, there have been signs of episodic excess liquidity in the
banking system, raising concerns about speculative tendencies in the FX
market and the risk of undermining recent exchange rate gains if left
unchecked.

These domestic developments are unfolding in an increasingly complex
global environment. Inflationary pressures have resurfaced in major
economies such as the United States, the United Kingdom and China, driven
by energy price volatility, strong service sector demand, and on-going
supply-side disruptions. Central Banks in these climes have embraced
cautious policy stance by delaying rate cuts or tightening further to anchor
inflation expectations.
In parallel, the modest but persistent strengthening of the U.S. dollar, coupled
with renewed uncertainty over trade policy, including the expected tariff
actions by a potential Trump administration in August, warrants caution for
emerging and frontier markets, particularly those like Nigeria with open
capital accounts and commodity-dependent earnings.
It is within this context that I view discussions around monetary easing as
premature. While we must remain sensitive to growth concerns, especially
given that real GDP growth remains below potential, the overriding priority
must be to secure stability and reinforce confidence in the policy framework
and transmission. Positive real interest rates, which have now been restored,
provide us with a more credible anchor to attract capital inflows and support
naira-denominated assets.
A forward-looking risk assessment reveals a broadly supportive domestic
outlook. Improved oil production and price dynamics, along with reduced
external debt service and resumption of naira-for-crude arrangements,
should bolster reserves and strengthen Nigeria’s external position. Fiscal
reforms and ongoing infrastructure investments are also expected to support
domestic activity. However, inflation may remain sticky in the near term,
owing to base effects, cost-push rigidities, and lingering structural deficiencies
in the food and energy sectors.
In light of the fragile but sustained disinflation path, ongoing external
uncertainties, and the need to preserve monetary credibility, maintaining the
current policy stance is prudent, strategic and optimal. A premature pivot to
easing could jeopardise the hard-earned gains in price and exchange rate
stability, while the sustenance of the current posture allows the transmission of
past tightening to permeate fully through the economy.
The Committee remains proactive in re-calibrating the policy stance
accordingly, should conditions evolve more favourably over the coming
quarters, evidenced by a firmer decline in core inflation and evidence of a
durable convergence in the FX market. However, a "higher-for-longer"
posture remains the most appropriate path to guide the economy through
this transition phase and ensure that stability is not only achieved but
sustained.

6. LYDIA SHEHU JAFIYA
At the 301st meeting of the Monetary Policy Committee (MPC), I voted to
maintain policy parameters at their extant levels, while monitoring the risks
and uncertainties around domestic price and output developments.
Specifically, I voted to:
1. Retain the MPR at 27.50 per cent.
2. Retain the asymmetric corridor around the MPR at +500/-100 basis points.
3. Retain the Cash Reserve Ratio of Deposit Money Banks at 50.00 per cent
and Merchant Banks at 16.00 per cent.
4. Retain the Liquidity Ratio at 30.00 per cent.
THE GLOBAL ECONOMY
Global growth has remained positive although April 2025 World Economic
Outlook projects a deceleration from 3.3 per cent in 2024 to 2.8 per cent in
2025, with a moderate recovery to 3.0 per cent in 2026. The potential
slowdown is on account of rising trade barriers, geopolitical tensions and
increasing policy uncertainties. Growth in Advanced Economies is expected
to moderate in 2025 reflecting increasing policy uncertainties and trade
tensions. Meanwhile, output in Emerging Markets and Developing Economies
(EMDEs) is projected to decelerate, reflecting persistent inflationary pressures,
exchange rate pressures, infrastructural deficits, and other macroeconomic
vulnerabilities.
Global inflation has eased, but the pace of disinflation has slowed, reflecting
price stickiness across some categories of goods, as well as the impact of
new tariff regimes, alongside structural rigidities such as exchange rate
pressures and infrastructure deficits predominantly observed in EMDEs.
Nonetheless, central banks, especially in Advanced Economies, have
continued with monetary easing, albeit cautiously, which is expected to
gradually improve financial conditions. Consequently, global headline
inflation is projected to moderate to 4.3 per cent and 3.6 per cent in 2025
and 2026, respectively, from 5.7 per cent in 2024 (April 2025 WEO).
Global trade is projected to decline to 1.7 per cent in 2025, before
recovering to 2.5 per cent in 2026 compared to 3.8 per cent in 2024. The
downgrade, as reported in April 2025 WEO, reflects escalating trade tensions,
geopolitical crisis, weaker growth in major economies and climate related
shocks.

THE DOMESTIC ECONOMY
Real Gross Domestic Product (year-on-year) in Q1 2025 increased by 3.13 per
cent from 2.27 per cent and 3.38 per cent in Q1 2024 and Q4 2024,
respectively. The growth performance in the reviewed period is reinforced by
the continued expansion, though moderately, in the Composite Purchasing
Managers' Index (PMI) which rose to 52.3 index points in June 2025 from 52.1
index points in the preceding month.
Headline inflation (year-on-year) decelerated to 22.22 per cent in June 2025
from 22.97 per cent in May, largely driven by the moderation in energy
commodities and farm produce. On a month-on-month basis, however,
headline inflation increased to 1.68 per cent in June 2025 from 1.53 per cent
in May. Analysis of components of headline inflation shows that core inflation
rose to 22.76 per cent in June 2025 from 22.28 percent in May, driven mainly
by an increase in cost of transportation, while food inflation increased to
21.97 per cent in June 2025 from 21.14 per cent in May, largely due to an
increase in the price of processed food.
Monetary aggregates increased with Broad Money (M3) rising by 43.65 per
cent (year-to-date) due to the increase in Net Foreign Assets (NFA). However,
this factor has negligible implications for inflationary pressure, compared with
a Net Domestic Assets (NDA) driven M3 growth.
The review period witnessed a resilient external sector, despite persisting
global economic fragmentation and macroeconomic uncertainties. Total
Foreign Portfolio Inflows (FPI) increased largely on account of improved
investor sentiment, and high FPI participation in fixed income instruments on
account of positive real interest rate. Similarly, the external reserves stood at
US$39.01 billion on May 14, 2025, up from the US$38.72 billion attained at endApril 2025. The reserves position could support 7.91 months of import of goods
and services and 11.64 months of import of goods only.
Financial Soundness Indicators (FSIs) of the banking system remained strong,
following the commitment of the Central Bank of Nigeria (CBN) to a riskfocused supervisory strategy.
CONSIDERATIONS FOR VOTING
The July 2025 MPC meeting held against the backdrop of improved
macroeconomic indicators. Headline inflation trended downwards, growth
remained positive, trade surplus was attained, external reserves maintained a
comfortable position, and the foreign exchange market witnessed significant
stability.

As economic fundamentals continue to strengthen, future monetary easing
will appear to be a prudent action to foster growth, leveraging the multiplier
effect of increased investment and consumption, enabled by low borrowing
costs. Indeed, whilst growth has shown resilience despite the contractionary
stance of monetary policy, there is need to strengthen its drivers, close output
gaps and improve the momentum.
It is noteworthy that while headline inflation is moderating, the index remains
elevated at the double-digit level, signifying the imperative to stay the course
and avoid premature monetary easing. Also, there are indications of
underlying price pressures as evidenced by the increase in core and food
inflation, coupled with indications of liquidity pressures which underscores the
need to sustain the current focus on disinflation.
Relatedly, there is need to strengthen the positive real interest rate to align
with global financial conditions leading to improved capital flow and
competitiveness.
I reiterate my support for the MPCs decisions which have consistently been
guided by data and aligned with the fiscal and monetary authorities’
objectives. Indeed, the objectives of price stability and growth acceleration
are mutually inclusive. In my opinion, and based on evidence, monetary and
structural factors are largely behind the current price developments.
Addressing the current spectre of inflation, therefore, requires the sustenance
of synergy between the fiscal and monetary authorities to address price
stability and growth challenges and put the economy on an accelerated
self-sustaining growth path.
The fiscal authority remains committed to fiscal sustainability, structural
reforms, and private sector participation. The reforms have ushered in market
transparency, competitiveness, and an improved business environment.
Resources are being attracted in Foreign Direct Investment (FDI) inflows,
some targeting the oil and gas sector.
While energy prices have been adduced as a major driver of inflation
through increased transportation costs, Petroleum Motor Spirit (PMS) supply
and prices have stabilized due to improved domestic production of refined
petroleum products. The signing of the four (4) tax reform bills is expected to
broaden revenue sources of Government, enhance ease of doing business
and make growth more inclusive.
The future path of food inflation will be contingent on the effectiveness of
ongoing Federal Government interventions in the agricultural sector,
particularly those aimed at improving access to farm inputs and improving
security
conditions
during
the
current
rain-fed
cultivation
cycle,

complemented by irrigated dry season farming. For core inflation, the
sustained strengthening of the exchange rate and stable energy prices are
likely to be important factors in moderating inflationary pressures.
Noting the persisting risks to inflationary pressures, there is need to be cautious
of upside risks to inflation and to continue to adjust monetary policy to
domestic conditions.

7. LAMIDO ABUBAKAR YUGUDA
On 22nd July 2025 at the 301st Monetary Policy Committee (MPC) meeting, I
voted to hold all the policy levers as follows:
1. Retain the Monetary Policy Rate (MPR) at 27.50 percent;
2. Retain the asymmetric corridor around the MPR at +500/-100 basis
points;
3. Retain the Cash Reserve Ratio (CRR) at 50 percent for Deposit Money
Banks and 16 percent for Merchant Banks; and
4. Retain the Liquidity Ratio at 30 percent.
The meeting took place against a backdrop of continuing uncertainty
around the global economic outlook, lower global growth prospects, and
increasingly cautious disinflation by central banks. On the domestic front,
June 2025 headline inflation has decreased – the third consecutive monthly
decline – but both core and food inflation trended up suggesting the
persistence of inflationary pressures.
In my opinion, the MPC should sustain its focus on fighting inflation by
maintaining the current tight monetary policy stance until inflation declines to
a more reasonable level.
Global Macroeconomic Developments
Global inflation has continued to decelerate, with inflation in many
Advanced Economies now gradually approaching the long-run policy
targets of their respective central banks. However, in the US headline inflation
has increased slightly to 2.4 percent in May 2025 against 2.3 percent in April,
reflecting continuing concerns over the final rollout and impact of tariffs vis-àvis its major trading partners.
Global output increased in the first quarter of 2025 on account of a robust
expansion in services and a sharp rise in exports to the US in anticipation of
the implementation of the new tariff regime. However, the outlook for the rest
of the year and 2026 is rather subdued on account of the pervasive
uncertainty over the evolving international trade environment. Unsurprisingly,
commodity prices including oil are expected to continue to soften. This
underscores the need for commodity exporters such as Nigeria to have
adequate fiscal, external and other policy buffers to navigate the emerging
challenges and cushion the impact of any adverse external shocks.
Negative US dollar sentiment continues to weigh on the financial markets,
accentuated by concerns over the high US budget deficits recently
cemented into legislation, an unsustainable public debt trajectory, and the
future of the Fed’s independence. The US dollar, long considered a safe-

haven asset, has lost about 15 per cent of its value since its peak in
September 2022. The dollar index, which measures the currency’s strength
against a basket of six other currencies, has equally declined by more than
10 per cent in the first half of 2025.
On the other hand, gold, the ultimate safe-haven asset, has hit record levels –
rising by 26 per cent in the first half of 2025 – as investors fly to quality. The
Bank should continue to monitor these market developments closely with a
view to taking precautionary measures as may be necessary.
Domestic Macroeconomic Developments
Domestic inflation remains high but is coming down gradually. Headline
inflation decreased to 22.22 percent in June from 22.97 percent in May 2025
reflecting easing energy prices and a more stable exchange rate. On the
other hand, both core and food inflation increased, possibly owing to food
price seasonality and a lag in the transmission of exchange rate gains to
certain parts of the domestic supply chain.
Relative to the level in December 2024, Broad Money (M3) grew moderately
by 3.65 percent in June 2025 driven entirely by an increase in net foreign
assets (NFA), while net domestic assets (NDA) declined over the same period.
Both net claims on Other Sectors and net claims on Government declined
markedly. This growth in broad money driven largely by an increase in NFA –
rather than NDA – has minimal implications for inflationary pressure.
The rebased GDP data from the National Bureau of Statistics (NBS) shows that
output grew at 3.38 percent in 2024. The composite Purchasing Managers
Index (PMI) rose to 52.3 in June 2025 compared to 52.1 in the preceding
month with agriculture, industry and services all posting increased activity.
This is further evidence that despite the tight monetary conditions the Nigerian
economy is growing modestly, and domestic investment is responding
positively to the increasing certainty engendered by a declining inflation rate
and a more stable exchange rate.
The current account surplus moderated in the first quarter of 2025 to $3.73
billion from $3.80 billion in the previous quarter. Gross external reserves rose to
$40.11 billion on 18 July 2025, enough to cover 9.5 months of imports of
goods. The effort to attract more diaspora foreign exchange flows has been
quite successful and should be strengthened. The progressive growth of both
gross and net foreign exchange reserves provides the much-needed external
buffer to anchor exchange rate stability.

The Nigerian banking sector continues to demonstrate resilience in the face
of a challenging macroeconomic environment. Capital adequacy in the
banking sector has improved as banks raise capital to meet the new
recapitalization requirements. The banking industry liquidity ratio and most of
the financial soundness indicators remained within regulatory limits during
June 2025. A strong, sound and safe banking system is a sine qua non for
financial system stability and the efficient transmission of monetary policy.
The Bank should therefore continue to be proactive in its oversight and
surveillance of the banking sector.
Federal Government revenue has recorded a significant increase during the
first quarter of 2025, rising by 28.95 percent over the corresponding period in
2024, owing to higher oil receipts. Both capital and recurrent expenditure rose
by 58.89 percent and 93.31 percent respectively over the same period. The
corresponding fiscal deficit increased by 78.23 percent. The increasing crude
oil production and associated receipts present an opportunity for the Federal
Government to begin to reduce the fiscal deficit and move the public debt
and debt service burden onto a more sustainable path.
Conclusion
The available data confirms that the current tight monetary policy stance is
having the desired effect on stabilizing prices. This policy stance needs to be
sustained for a longer period and complemented with adequate supervisory
oversight of the foreign exchange market in order to achieve lower inflation
and sustain exchange rate stability.
I remain fully committed to the achievement of the objectives of the
Monetary Policy Committee and the mandate of the Central Bank of Nigeria.

8. MUHAMMAD SANI ABDULLAHI
My Vote
This July meeting of the Monetary Policy Committee (MPC) provides an
opportunity and critical platform for in-depth reflection on both historical and
emerging challenges, as well as an evaluation of the progress made in the
implementation of our monetary policy.
Balancing the Bank’s monetary and price stability mandate, financial system
stability and economic growth have remained key areas of focus. At the
same time, developments in the global and domestic macro environments
have remained key drivers of the Committees consideration and decisions.
This meeting is unique in several ways. Firstly, the hold stance since the past
two MPCs continues to permeate through the system with significant
outcomes. Stability has been sustained in the FX market, and the rebased Q1
2025 GDP numbers showed a positive 3.11 per cent. Secondly, the myriad
challenges that clutter efficient policy transmission have been substantially
addressed.
Data released by the National Bureau of Statistics (NBS) showed the notable
progress around inflation dynamics with the third consecutive month of
observed decline in headline inflation. The moderation in headline Inflation
continued in June 2025 but with a mixed outcome. Whilst the headline
inflation declined to 22.22% in June 2025 from 22.97% in May 2025, both core
and food inflation increased to 22.76% and 21.97% from 22.28 and 21.14%,
respectively. The observed decline in headline inflation, despite the rise in
both food and core inflation is primarily attributable to significant a decrease
in energy prices, underscoring the complex interdependencies between the
various components of the inflation basket.
In terms of composition, Core inflation (22.76%) being close to headline
(22.22%) indicates broad-based inflation, not just food or energy-related (i.e.,
not purely supply-driven). Food inflation at 21.97% is a slight moderation but
still high, showing some cost-push pressures likely from agricultural or supply
chain issues. This suggest that the persistent core inflation remains a risk to
watch, or inflation expectations are de-anchoring. Going forward, the
trajectory of core inflation should be a cause for concern. Interbank rates
remain high in response to our previous tightening actions while market
sentiments remain positive, and naira assets are gaining traction.

In my submission at the 300th meeting in May, I noted that the overarching
objective of safeguarding long-term macroeconomic stability remains
paramount. In the current context, my assessment is that additional monetary
tightening at this stage could generate diminishing returns and potentially

introduce
adverse
second-round
effects,
thereby
rendering
it
counterproductive.

With the transmission lag of previous policy actions still in place, the decision
at this meeting is to retain existing parameters, thereby providing headroom
for a more comprehensive assessment of outcomes over the medium to long
term. Thus, again, I voted to hold all parameters constant. This decision is
supported by current outlook for the economy, performance of the
macroeconomic indicators as well as the inflation forecast, and consumer
and business expectations. This vote is consistent with my prior position
advocating for a policy pause until preliminary signals of macroeconomic
stabilization become evident.
Specifically, I voted to:
1. Retain the MPR at 27.50 per cent.
2. Retain the asymmetric corridor around the MPR at +500/-100 basis
points.
3. Retain the Cash Reserve Ratio of Deposit Money Banks at 50.00 per
cent and Merchant Banks at 16 per cent.
4. Retain the Liquidity Ratio at 30.00 per cent.
My Considerations
Inflation Trends and Dynamics
The June 2025, inflation data from the National Bureau of Statistics, using the
2024 base year, showed a decline in headline inflation (year-on-year) to
22.22% from 22.97% in May 2025, core and food components rose to 22.76
and 21.97 per cent from 22.28 and 21.14 per cent, respectively. This
enhanced decomposition of the inflation components provides an avenue
for a deep dive into the major drivers and for proffering targeted policies to
anchor inflation expectations effectively. Energy costs are included in the
headline measure but excluded from the core measure. Accordingly,
sustaining the current policy tightening stance will provide the right response
to rein in aggregate demand and address rising core inflation. On food,
targeted and intensified efforts by the fiscal authorities will be required to
address supply-side rigidities. In my view, the key risk for monetary policy is
persistent core inflation which warrants careful monitoring and continued use
of available policy tools.
Month-on-month showed an increase in all measures of inflation. Headline
increased to 1.68% in June from 1.53% in May 2025, core to 1.17% in June 2025
from 0.95% and food to 3.25% in June from 2.19% in May 2025. Nigeria’s
imported food inflation however, moderated for the sixth consecutive month

to 15.74% in June 2025, down from 16.04% in May, largely reflecting the
greater efficiency and relative stability in the foreign exchange (FX) market
over the past year. In addition, improved domestic productive capacity has
supported local demand.
Despite the moderation in headline inflation recorded in June 2025, findings
from the Staff Household Expectation Survey (HES) indicate an improvement
in consumer price expectations, with households anticipating a continued
deceleration in inflation over the next three to six months. In tandem with the
HES, results from the June 2025 Business Expectations Survey (BES) reflect
strengthening business sentiment across key sectors, reinforced by improving
confidence in the macroeconomic outlook. In my view, these forwardlooking indicators suggest a gradual consolidation of disinflation expectations
and sustained optimism regarding macroeconomic conditions over the near
term, which could enhance the credibility and effectiveness of the
Committee’s policy actions.
Current inflationary pressures are acknowledged to be significantly driven by
structural and supply-side constraints, over which conventional monetary
policy tools exert limited direct influence. The concerted efforts by fiscal
authorities to reduce structural rigidities and address prevailing supply-side
constraints is expected to enhance the efficacy of monetary policy
transmission, improve aggregate supply responsiveness and reinforce
disinflation drive. Accordingly, the monetary policy stance will remain
anchored on curbing inflation, maintaining exchange rate stability, guiding
credit conditions, and managing short-term macroeconomic fluctuations
primarily through demand-side channels in the short to medium term.
Notably, the June Purchasing Managers’ Index (PMI) signals a potential
recovery in productive capacity, suggesting incremental improvements in
supply side capacity, which if sustained, could support disinflation efforts over
the medium term.
Continued improvements in the domestic supply of food and energy
commodities are expected to ease cost-push inflationary pressures, thereby
reinforcing the Committee’s disinflation strategy. Simultaneously, scaling up
export-oriented trade facilitation measures and upstream petroleum sector
investment incentives is projected to augment both oil and non-oil foreign
exchange inflows. Ultimately, these dynamics are anticipated to support
exchange rate stability, improve FX market liquidity, and contribute to
anchoring inflation expectations through enhanced external sector resilience
and a more credible nominal anchor.
It is expected that disinflation drive will continue to remain the key priority
focus of the MPC for the remaining part of 2025 and beyond.

Global Developments
The International Monetary Fund (IMF) has reviewed global growth
projections downwards to 2.8% in 2025 and 3% in 2026, from an earlier
estimate of 3.3% in both 2025 and 2026, compared with 3.2% in 2024,
reflecting increasing policy uncertainties and trade tensions. Output growth is
forecast to also moderate in both AEs and EMDEs. Global headline inflation is
projected to moderate to 4.3 and 3.6 per cent in 2025 and 2026, respectively,
from 5.7 in 2024. Oil prices have continued to moderate because of U.S.
trade policies. A major risk to oil price development is the likely increase in
supply by the US. For non-oil commodities, the increased attraction to gold
underscores its importance considering heightening global uncertainty and
the risk of a rebound of global prices.
Domestic Economic Developments
External Sector
The balance of payments (BOP) recorded a deficit of US$2.77 billion in
Q12025, against a surplus of US$1.10 billion in Q42024, on account of a
depletion in external reserves. Notwithstanding, gross external reserves
increased by 2.85 per cent to US$40.11 billion on July 18, 2025, representing
about 9.5 months of import cover for goods. Although global economic
fragmentation presents downside risks to critical foreign exchange inflow
channels, the outlook for the naira remains stable notwithstanding swings in
international crude oil prices.
Other Developments in the Economy
In the first quarter of 2025, Nigeria's rebased real GDP expanded by 3.13%
year-on-year, down from 3.84% in Q4 2024, primarily driven by the services
and industry sectors. The services sector grew by 4.33%, contributing 57.5% to
the aggregate GDP, while the industry sector experienced a 3.42% growth.
The composite Purchasing Managers' Index (PMI) indicated that business
activities expanded by 52.30 in June 2025 from 52.10 in May 2025 with respect
to the benchmark index, indicating six consecutive months of sustained
expansion in economic activities and a positive outlook for GDP growth for
the rest of 2025. This is attributed majorly to growth in agriculture sectors (55.2)
industry (51.4) and services (51.3). Increased activity and liquidity have
enhanced traction in the foreign exchange market. This is expected to
support business competitiveness and contribute positively to key PMI
indicators.

Monetary base and Broad Money liabilities rose by 3.65% to ₦17.50 trillion at
end-June 2025, relative to the level at end-December 2024. The month-onmonth figures showed a general decline in all the measures of the monetary
aggregates. Narrow money M1 showed the most contraction (1.49%)
indicating the impact of the Bank’s tightening policy.
The banking sector remains robust, fostering a more friendly business
environment and supporting economic activities as the data shows that most
of the indicators are within acceptable thresholds. The Bank will continue to
remain vigilant in ensuring the banking system’s stability and soundness.
The fiscal outlook remains stable, supported by a 3.66% month-on-month
increase in gross Federation Account receipts in June 2025 relative to May
2025. The uptick in revenue reinforces fiscal sustainability and reflects
improved government earnings performance. The observed improvement in
oil production would further support efforts to build fiscal buffers and a more
resilient fiscal framework in 2025 and beyond.
On the overall outlook, the uncertainty around the global economic
landscape remains elevated, the recent moderation in inflationary pressures
notwithstanding. Nonetheless, prevailing uncertainties may continue to exert
adverse effects on capital flow dynamics, import cost structures, and, by
extension, key assumptions underlying the domestic inflation outlook. Staff
model simulations incorporated a range of scenarios accounting for both
upward and downward shocks to international oil prices. Additionally, the
onset of the harvest season is expected to boost agricultural supply, with
potential disinflationary effects on food prices. Against this backdrop, the
decision to maintain all policy parameters unchanged reflects a data-driven
approach anchored in the imperative of preserving price stability.
Domestically, recent inflationary trends reflect a moderation in headline
inflation, indicative of a potential modulation point. This disinflationary
momentum is projected to continue over the short to medium term,
contingent upon maintaining extant tightening measures and sustained
improvements in supply-side conditions. Consequently, the decision to
maintain current policy parameters affords the Monetary Policy Committee
(MPC) sufficient latitude to evaluate the cumulative effects of previous rate
hikes and the associated tightening measures on the transmission
mechanism. Moreover, this hold-phase would enable economic agents to
internalize prevailing policy signals and align their spending and investment
decisions with the evolving macroeconomic environment.

9. MURTALA SABO SAGAGI
Context
Previous structural reforms implemented over the last three decades have
recorded limited successes in overcoming structural rigidities in Nigeria.
Limited economic diversification and overreliance on debt by the
government have worsened the vulnerability of the economy to shocks and
fluctuations in global commodity prices. Since mid-2023, unlocking
opportunities
for
economic
diversification
and
associated
welfare
improvement has remained the ultimate goal of the current structural
reforms. However, even with the removal of fuel subsidy and liberalization of
the exchange rates, the appetite for unfettered spending by the government
has grown even stronger. In the first quarter of 2025, the country has
witnessed an increase in total public debt from N144.67 trillion as of
December 31, 2024, to N149.39 trillion as of March 31, 2025. The country’s
debt profile is deteriorating and thus shrinking the fiscal space due to huge
debt service cost.
With the recent increase in daily crude oil production, new inflows of capital
and improved balance of payment, the naira is likely to keep appreciating to
reach the projected N1400/US$1 before the end of the year. The inflation
moderation attained and the doggedness of the Central Bank of Nigeria
(CBN) to ensuring foreign exchange unification and disciplined liquidity
management should be further harnessed to speed up growth and improve
welfare. To avoid reversal of the gains so far achieved, fiscal discipline and
deliberate effort to stimulate local productivity and employment are nonnegotiable.
Global and Domestic Environments
Opportunity for Nigeria’s economic rejuvenation is feasible considering that
global and local dynamics are gradually becoming increasingly promising.
The Israel-Iran conflict is deescalating and thus providing a glimpse of
regional stability in the Middle East. Even with the ongoing Israeli offensive on
Palestinians, the likelihood of widespread conflict is minimal because of the
growing international scrutiny. Also, the renewed involvement of the US in the
Russia-Ukraine conflict provides a glimpse of regional stability in Europe. All
these are indications that, even though global tensions persist, the likelihood
of supply chain disruption is minimal. This coupled with lower average
effective US tariff, higher than expected Front-loading, and developments in
other regions informed the revised IMF Global growth projection at 3.0
percent for 2025 a better outlook than the 2.8 per cent projected in April
2025. Also, a lower Global headline inflation is expected at 4.2 percent in
2025. Global growth prospects and moderation in inflation, including the

need to stimulate domestic growth informed the further rate cuts by many
global central banks in the Q2 2025.
The growing cordial relationship between Nigeria and its neighbours is
accelerating the implementation of the African Continental Free Trade
Agreement (ACFTA). Also, the recent relative macroeconomic stability has
boosted investor confidence and enabling businesses to project and plan.
The year-on-year headline inflation has moderated for three consecutive
months, to 23.71, 22.97 and 22.22 per cent in April, May, and June,
respectively. Growth in Nigeria is expected to reach 3.2 per cent in 2025
making it one of the highest in the region. To fast-track inclusive growth, a
policy shift is required to restore fiscal space, exercise more discipline,
promote domestic oil refining, and stimulate non-oil production and exports.
This is particularly instructive with the new Finance Act and improved oil and
non-oil revenues.
Major Considerations
i.
Capital importation increased from US$5,089.16 million in Q4 2024 to
US$5,642.07 million in Q1 2025 suggesting increased appetite for
Nigerian stocks, bonds and money market instruments. However,
insignificant investment went to agriculture and manufacturing. For
example, only US$0.85 billion was attracted by the manufacturing
sector in over 27 months.
ii.
Non-oil exports, despite limited investments in the first half of 2025,
reached $3.225 billion, a 19.59% increase from the previous year.
iii.
Oil production has reached an average of 1.78 million bpd suggesting
more foreign exchange inflows.
iv.
The gross foreign reserve rose above US$40 billion at end-May 2025
which can effectively cover up to 8 months of imports for goods and
services. The reserves will hopefully hit or exceed US$45 billion by the
fourth quarter.
v.
Nigeria’s total public debt rose to N149.39 trillion as of March 31, 2025.
vi.
Inflation has been moderating for most of the year and is likely to
reduce further in anticipation of good harvest season, declining energy
prices and exchange rate stability.
vii.
The exchange rate premium between the official and the parallel
market narrows significantly to just about 1 naira suggesting a near end
to the decades of uncertainty and arbitrage.

Conclusions
Sustainable macroeconomic stability and inclusive growth are attainable
with renewed fiscal discipline and growth enhancing policies. However, the
pathway and the policy coordination required are blurred. I voted to:

• Retain the Monetary Policy Rate (MPR) at 27.50 per cent
• Retain Asymmetric Corridor around the MPR to +500-100 basis points.
• Retain the Cash Reserve Ratio of Deposit Money Banks at 50 per cent.
• Retain the Cash Reserve Ratio of Merchant Banks at 16.0 per cent.
• Retain the Liquidity Ratio at 30.0 per cent.
Recommendations
1. Renewed growth enhancing adjustments are needed using fiscalmonetary tools to stimulate local productivity, reduce debt and
crowding out in private sector investment.
2. Growth agenda that is focused on promoting high potential and job
creating value chains, with strong involvement of states, should be
developed, legislated and implemented.
3. Deliberate efforts to attract Greenfield investments from Asia and the
Middle-East should be aligned with the growth agenda.

10. MUSTAPHA AKINKUNMI
Introduction
I hereby reaffirm my firm commitment to maintaining the current monetary
policy parameters, specifically, the Monetary Policy Rate (MPR), Cash
Reserve Ratio (CRR), and Liquidity Ratio at their existing levels. This position is
based on a thorough evaluation of key macroeconomic indicators, including
economic growth trends, inflationary pressures, exchange rate movements,
and overall financial system stability.
Over the past year, the sustained implementation of monetary tightening
measures has begun to produce measurable outcomes. While the delayed
effects of these policy actions have begun to crystalise, it is both prudent and
necessary to allow sufficient time for their full transmission throughout the
economy.
Preserving the current policy stance will, therefore, provide a clearer view of
its impact on moderating inflation, stabilizing the exchange rate, and
strengthening the resilience of the financial system. We remain committed to
closely monitoring macroeconomic conditions and aligning our actions with
the core mandates of the Central Bank of Nigeria.
Global and Domestic Economic Developments
Global GDP growth in Q1 2025 was divergent across major economies. The
Euro Area (1.2%), the United Kingdom (1.3%), and Japan (1.7%) recorded
modest momentum. In contrast, the United States experienced a slight
deceleration, with GDP growth easing to 2.0%. Among Emerging Markets and
Developing Economies (EMDEs), India maintained its robust trajectory with a
strong 7.4% expansion, while China remained stable, posting 5.4% growth. In
Sub-Saharan Africa, Ghana led with 5.3% growth rate, followed by Kenya at
4.9%, and Nigeria at 3.13%. Although Nigeria's growth rate is moderate by
comparison, the economy has, nevertheless, sustained an upward trajectory
since Q1 2024, reflecting a continued expansion.
Globally, inflation is trending downward across both advanced and
emerging economies. Nigeria’s inflation rate fell to 22.22% in June 2025,
driven by persistent disinflationary pressures. Egypt and Ghana also recorded
significant declines, with inflation dropping to 14.9% and 13.7%, respectively.
In Asia, both China and India experienced continued disinflation, reinforcing
the broader global trend of easing price pressures.
In Nigeria, sustained monetary tightening throughout 2024 has yielded
tangible results. Inflation volatility measured by the standard deviation
declined significantly, from 5.24% in 2024 to 0.84% in H1 2025, signalling the
effectiveness of the monetary transmission mechanism. Monthly data

indicates a consistent disinflationary trend since March 2025, with inflation
reaching 22.22% by June.
This decline was largely attributed to the moderation of energy prices,
particularly for cooking gas, charcoal, and diesel. This is consistent with
commodity price theory. Additionally, improved exchange rate stability
played a supportive role. However, rising food processing costs continued to
exert upward pressure on food inflation, which rose slightly to 21.97% in June
from 21.14% in May. This pressure is expected to ease in the coming months
as the harvest season increases domestic food supply and reduces reliance
on imports, thereby moderating month-on-month headline inflation, which
rose to 1.68% in June from 1.53% in May.
Despite global uncertainties such as trade tensions and geopolitical risks, the
Nigerian Naira has demonstrated notable resilience. Exchange rate volatility,
as measured by standard deviation, dropped significantly from N203/US$ in
2024 to just N5.34/US$ in H1 2025. Concurrently, Nigeria’s gross external
reserves grew by 9% year-on-year, reaching US$37.81 billion in June 2025 (up
from US$34.76 billion in June 2024), and further increased to US$40.11 billion by
July 18, 2025. This provides sufficient buffer to cover approximately 9.5 months
of goods imports, enhancing external sector stability.
These positive developments across key macroeconomic indicators suggest
strong potential for reversion to long-term equilibrium trends. Moreover, the
effects of monetary tightening have reinforced stability in the banking sector.
Improvements in financial soundness indicators point to enhanced resilience,
safety, and systemic soundness.
Rational for the Vote
Key macroeconomic variables, namely, inflation, the exchange rate, and
external reserves demonstrate a strong tendency to revert to their long-term
equilibrium levels following both internal and external shocks. This meanreverting behaviour supports the case for maintaining current monetary
policy measures, as it reflects underlying stability within the existing policy
framework.
Furthermore, there is a strong and statistically significant relationship between
the Monetary Policy Rate (MPR) and critical macroeconomic indicators such
as inflation, exchange rate movements, and credit to the private sector. This
robust correlation highlights the effectiveness of timely and well-calibrated
policy interventions in steering these variables toward their desired outcomes.
Importantly, the MPR continues to serve as the primary tool for responding to
inflationary pressures, reinforcing the need to treat inflation dynamics as a
key input in shaping future monetary policy actions.

Taken together, these insights are consistent with the positive results observed
under the current policy stance. They reaffirm the effectiveness of ongoing
monetary policy in fulfilling the Central Bank of Nigeria’s core mandates,
namely, maintaining price stability, fostering sustainable economic growth,
and ensuring the stability of the financial system. Accordingly, the evidence
supports a cautious, data-driven, and consistent approach to monetary
policy in the current macroeconomic environment.
Policy Implications and Outlook
The current monetary policy stance has played a pivotal role in significantly
reducing inflationary and exchange rate pressures, thereby enhancing
macroeconomic stability and bolstering investor confidence in the Nigerian
economy. Reflecting this improved outlook, the International Monetary Fund
(IMF), in its July 2025 forecast, revised Nigeria’s economic growth projections
upward by 0.4 and 0.5 percentage points for 2025 and 2026, respectively. The
economy is now expected to grow by 3.4 percent by the end of 2025.
Looking ahead, further disinflation is anticipated over the coming months,
driven by the continued effects of tight monetary policy, sustained exchange
rate stability, declining petrol (PMS) prices, and a seasonal reduction in food
prices due to the harvest period. These developments collectively reinforce
the effectiveness of the current policy stance and support continued
progress toward macroeconomic stability and inclusive growth despite
prevailing global trade disruptions and geopolitical uncertainties.
Conclusion
In light of the evidence-based improvements in reducing volatility across both
inflation and exchange rates alongside clear signs of strengthened financial
system stability, I advocate for a continued data-driven, forward-looking
policy approach. Central to this strategy is a continued emphasis on inflation
responsiveness, which remains critical to achieving our primary mandate of
price stability.
Accordingly, I vote to:
•
Maintain the Monetary Policy Rate (MPR) at 27.50 percent
•
Retain the asymmetric corridor at +500 / –100 basis points around the
MPR
•
Maintain the Cash Reserve Ratio (CRR) at 50.00 percent for Deposit
Money Banks and 16.00 percent for Merchant Banks
•
Retain the Liquidity Ratio at 30.00 percent.

11. PHILIP IKEAZOR

There has been a gradual deceleration in inflation and stability in the foreign
exchange market over the past three months in response to the restrictive
stance of monetary policy. However, food and core inflation are still rising,
and the global socioeconomic uncertainties are yet to recede. To curb both
the direct and the second-round effects of the global uncertainties and
stabilise longer-term inflation expectations, in my view, it is necessary to
continue with moderation in monetary policy restraint to squeeze out
persistent inflationary pressures without constraining growth.
I therefore voted to:
(1) Retain the MPR at 27.50 per cent.
(2) Retain the Asymmetric corridor around the MPR at +500/-100 basis
points.
(3) Retain the Cash Reserve Ratio (CRR) of DMBs at 50.00 per cent.
(4) Retain the Cash Reserve Ratio of Merchant Banks to 16.00 per cent.
(5) Retain the Liquidity Ratio at 30.00 per cent.

Developments in the Global and Domestic Economy
The revised outlook for global growth shows prospects for decelerated
growth, even as trade-related distortions wane due to the expected frontloading effects of the USA effective tariffs and the extension of pause on
country-specific reciprocal tariffs.
According to the International Monetary Fund (IMF), global growth is
projected at 3.0 percent for 2025 and 3.1 percent in 2026, which is 0.2
percentage point higher than the forecast for April 2025. Inflation is expected
to continue to decline, but still out of the tolerable range, with headline
inflation falling to 4.2 per cent in 2025 and 3.6 percent in 2026, despite the
expected rise in US inflation above its target. This is driven by risk of potentially
higher tariffs, elevated uncertainty, and the persistence of geopolitical
tensions.
As major central banks (except for the ECB that has recently cut rate),
continued to adopt a wait-and-see policy, to grapple with elevated growth

and inflation uncertainty, the domestic economy remains robust with
negative spillover effects of international commodity prices, and exchange
rate inflationary pressures reaching their turning points. Nonetheless, the
global economic uncertainty continued to pose a threat to Nigeria’s exports
as disruptions in the global supply chain heightened with attendant effects
on imported inflation and shrinking fiscal space.
My Considerations
In the last two quarters, the Nigerian economy has undergone a statistical
recalibration with the published rebased CPI and domestic output showing
that economic growth is improving, while foreign exchange and inflationary
pressures are gradually dissipating. The real gross domestic product grew by
3.13 per cent (year-on-year) in the first quarter of 2025, representing 0.86
percentage point, higher than the 2.27 per cent recorded in the first quarter
of 2024 but less than the 3.76 per cent recorded in the preceding quarter in
2024.
We have also witnessed a positive macroeconomic development – declining
inflation and stable foreign exchange rate - reflecting effective stance of our
monetary policy which have successfully anchored inflation expectations
and reduced the volatility in the foreign exchange market. As such, one can
say with significant degree of certainty that the economy is on a sustainable
path. This is also reflected in the moderation in interest spread to 21.99 at
end-June 2025, down from 22.20 per cent at end-December 2024, increase in
external reserves and capital inflow.
Despite these positive developments, the dynamics of real growth remained
stagnated from 1.22 between Q2 and Q1 2024 to -0.63 percentage points
between Q4-2024 and Q1-2025. In terms of inflation, there seems to be an
imbalanced pattern in inflation rate where major components like food and
core inflation rose by 0.83 and 0.48 percentage points, respectively, even
though headline inflation declined by -0.75 percentage point from 22.97 in
May to 22.22 per cent in June 2025. Similar trend was observed in January
2005 when inflation declined from 10.6 in December 2004 to 9.8 in January,
but food prices increased from 12.1 per cent to 15.1 per cent and core
inflation increased from -1.78 to 1.28. While these trends seem normal, they
point to the effects of structural factors, which also makes it difficult for
monetary policy to effectively track inflation trajectory.
Therefore, to sustain the momentum of the tight stance of monetary policy,
while accommodating the growth path of the economy and managing the
complexities associated with the imbalanced inflation path, I supported
monetary moderation, by holding all the monetary policy parameters

unchanged. Moreover, the direction of the fundamentals that will help us to
properly align the monetary action are yet to crystallize following the
rebasing exercise. For me, my support for a wait and see approach is based
on three important reasons: aligning the dynamic path of the rebased CPI visà-vis the expected direction of the monetary stance; recalibration of the
memo items in monetary aggregates like the income velocity of money to
align properly with the rebased GDP; and more importantly, raising rate at
this time without allowing the market to assimilate the changes in the
economy will transmit excess shock to the market and increase exposure to
capital flight in the event of financial instability, especially as prices are
stabilizing.
It is concerning that energy prices are falling more rapidly in the urban areas
relative to rural areas. This also accounted for a more rapid decline in the
prices of farm produce in the urban areas compared to rural areas. I think the
state and local governments should be concerned. As one can observe,
inflation has become a rural phenomenon, and from all indications, what is
moderating inflation is the prices of farm produce and energy. Farm produce
(month-on-month) in the rural area declined from 5.0 to -3.1 per cent and
from 31.79 to -17.64 per cent in the urban area.
The increase in the price of imported food in the urban areas is also
concerning. I think this is pressurizing the foreign exchange rate, which can
be seen from foreign exchange utilization by food products. Fiscal authorities
should be thinking of strengthening demand management policies to
redirect consumption to domestic products, especially in highly substitutable
commodities.
Though our projections have shown an expected annual average growth of
3.9 in real output and a continued moderation in inflation, I am of the view
that there needs to be simultaneous expenditure-switching and expenditurechanging policies by both the Bank and the fiscal authorities to manage
aggregate demand and supply disruption, to ensure the stability of the
foreign exchange market.
In conclusion, fiscal authorities around the world are facing pressures as fiscal
space shrinks leading to stringent fiscal measures like expenditure prioritization
and the expansion of tax base. While the monetary-fiscal policy collaboration
between the Bank and fiscal authorities and the ensuing non-inflationary
growth have continued to moderate price pressures and stir growth, the
national and sub-national governments must continue to address key growth
and stable price enablers such as security, agriculture, and legacy
infrastructure. However, in doing so, monetary policy needs to be proactive

in terms of policy coordination and making decisions on rate adjustments to
avoid fiscal surprises stemming from global uncertainties.

12. OLAYEMI CARDOSO
Governor of the Central Bank of Nigeria and Chairman, Monetary Policy
Committee
The July 2025 Monetary Policy Committee (MPC) meeting convened during a
period of increased optimism on the back of generally positive developments
that signal improved macroeconomic conditions. The trade balance has
remained in surplus, the exchange rate is relatively stronger, and FX reserves
continue a steady climb in absolute terms and in the structure and quality of
balances. The stable conditions are providing businesses and investors with a
conducive environment to plan appropriately, and Nigerians now have more
confidence in their currency and are choosing to hold less balances in
domiciliary accounts. Inflation has sustained a moderating trend and, whilst
there is room for further improvement, it is clear that our tight policy stance
and the adoption of orthodox frameworks are having the desired impact.
We must protect these gains, and the credibility of the MPC will be reinforced
by our ability to reevaluate our positions when confronted with data that
indicate a changing landscape.
Clouds of uncertainty permeate the global outlook and while inflation
appears to be generally easing across major economies, recurring price
shocks, volatile commodity prices, and geopolitical tensions continue to
shape global markets.
On the domestic front, headline inflation has maintained a moderating trend
for consecutive months but underlying inflationary pressures remain elevated,
reflecting persisting structural constraints in the supply chain and the lagged
impact of excess liquidity from prior years of extensive monetary
accommodation. Core inflation also remains sticky, driven by cost-push
factors such as transportation and cost of utilities.
Signs of recovery in output are evident, especially in agriculture and services,
and business surveys show improving confidence, with manufacturing activity
firmly in an expansionary trajectory. These provide an indication of the
underlying resilience of the economy.
The foreign exchange market continues to benefit from coordinated reforms
that promote price discovery and improved liquidity, which have sustained
the stability of the market. Capital inflows have shown a notable rebound
following the slowdown recorded after tariff induced global markets volatility
a few months ago, but investor sentiment remains sensitive to policy clarity
and external shocks.

The sustained stabilization of monetary conditions naturally calls for a review
of our approach to the implementation of our policy stance and the liquidity
management framework to ensure effective monetary policy transmission.
There is growing evidence of the need for the adoption of more marketbased instruments to support the development of the yield curve and further
promote savings and the stability of the financial system. The availability of
these tools will be important for the management of the transition from a high
reserve requirement environment without creating market distortions. This is
particularly important given the persistently high demand for government
securities in the primary debt markets, an indication of high liquidity levels in
the financial system.
In evaluating my stance in the context of the foregoing developments and
data driven forecasts, there is enough justification for a sustained tightening
of monetary policy. The pace of disinflation remains tepid and insufficient to
warrant any easing of monetary conditions, and underlying inflation pressures
and high stock of money supply call for a firm response before price stability is
threatened. The negative real yields obtainable in the market also pose a
deterrent to savings and investments in the domestic economy, and our
focus must remain on lowering inflation levels further, to improve the
attractiveness of local assets.
Based on these considerations, I voted to: (i) Retain the Monetary Policy Rate
(MPR) at 27.50%; (ii) Maintain the asymmetric corridor at +500/-100 basis
points; (iii) Hold the Cash Reserve Ratio (CRR) at 50.00% for DMBs and 16.00%
for Merchant Banks; and (iv) Retain the Liquidity Ratio at 30.00%.
To improve monetary policy effectiveness, transparent engagement is
essential to strengthening public confidence and ensuring that inflation
expectations remain anchored. Coordination with fiscal authorities must also
be deepened to ensure alignment in debt management, liquidity
forecasting, and fiscal consolidation. Thus, we must sustain communication
efforts to enhance stakeholder understanding of our strategy and expected
outcomes.
The Bank remains committed to achieving a stable macroeconomic
environment that supports inclusive and sustainable growth. Consequently,
available monetary tools will continue to be deployed judiciously in pursuit of
this goal.

OLAYEMI CARDOSO
Governor
July 2025