Date: Tuesday, 20 May 2025
Ref: CBN/MPC/COM/157/300
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 300th meeting on the 19th and 20th of May 2025. The Committee
reviewed developments in the global and domestic economies including the
risks to the outlook. All twelve members of the Committee were in
attendance

Decisions of the MPC
The Committee was unanimous in its decision to hold policy and thus
decided as follows:
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.
Considerations
The MPC noted the relative improvements in some key macroeconomic
indicators which are expected to support the overall moderation in prices in
the near to medium term. These include the progressive narrowing of the gap
between the Nigeria Foreign Exchange Market (NFEM) and Bureau De
Change (BDC) windows, the positive balance of payments position, and
easing price of PMS. Members also noted with satisfaction the progressive
moderation in food inflation and, therefore, commended the government for
implementing measures to increase food supply as well as stepping up the

fight against insecurity, especially in farming communities. The MPC, thus,
encouraged security agencies to sustain the momentum while government
provides necessary inputs to farmers to further boost food production.
The Committee, however, acknowledged underlying inflationary pressures
driven largely by high electricity prices, persistent foreign exchange demand
pressure and other legacy structural factors. The MPC noted new policies
introduced by the Federal Government to boost local production, reduce
foreign currency demand pressure, and thus, lessen the pass-through to
domestic prices.
Given the relative stability observed in the foreign exchange market,
Members urged the Bank to sustain the implementation of the ongoing
reforms to further boost market confidence. The Committee also called on
the fiscal authority to strengthen current efforts at enhancing foreign
exchange earnings, especially from gas, oil and non-oil exports.
The MPC, however, expressed concerns about the recent decline in crude oil
prices, attributable to increased production by non-OPEC members as well
as uncertainties associated with U.S. trade policy, which present new
challenges for fiscal receipts and budget implementation.
The Committee reaffirmed the continued stability of the banking system
following notable improvements in key performance indicators and observed
the appreciable progress in the ongoing recapitalization exercise. Members,
thus, called on the Bank to sustain its effective oversight of the industry to
ensure compliance with regulatory and macroprudential guidelines.
On the strength of these considerations, and driven by the continued
uncertain policy environment, exacerbated by ongoing global shocks,
members weighed the available policy options and were unanimous in their
decision to hold policy to enable a better understanding of near-term
developments. Members reaffirmed their commitment to prioritise policies
targeted at anchoring inflation expectations and easing exchange rate
pressure.
Key Developments in the Domestic and Global Economies
According to the National Bureau of Statistics (NBS), headline inflation (yearon-year) declined to 23.71 per cent in April 2025, compared with 24.23 per
cent in March 2025. On a month-on-month basis, it also declined to 1.86 per
cent in April 2025, from 3.9 per cent in the previous month.
Both food and core components contributed to the decline in inflation in the
period. Food inflation eased further to 21.26 per cent in April 2025 from 21.79
per cent in the previous period. Core inflation also declined to 23.39 per cent
in April 2025, compared with 24.43 per cent in March.

Real GDP (year-on-year) grew by 3.84 per cent in the fourth quarter of 2024,
compared with 3.46 per cent in the preceding quarter. This improvement was
driven by both the oil and non-oil sectors, with the services sector being the
major contributor.
Gross external reserves increased by 2.85 per cent to US$38.90 billion as at
16th May 2025, from US$37.82 billion at end-March 2025. This represents an
import cover of 7.6 months for goods and services. The balance of payments
(BOP) recorded a surplus of US$1.10 billion in the fourth quarter of 2024,
compared with US$4.21 billion in the preceding quarter, on account of
moderation in current account surplus.
Although global output growth is expected to remain positive despite existing
and
emerging
headwinds,
the
International
Monetary
Fund
(IMF)
downgraded its global growth forecast to 2.8 per cent in 2025 and 3.0 per
cent in 2026, compared with 3.3 per cent in 2024 due to the uncertain policy
environment.
Members were, thus, unanimous in their resolution to maintain close
surveillance of developments in both the domestic and global environments
to enable appropriate policy response to emerging shocks.
The next meeting of the Committee is scheduled to hold on the 21st and 22nd
of July 2025.
Thank you.
Olayemi Cardoso
Governor,
Central Bank of Nigeria
20th May 2025.

PERSONAL STATEMENTS BY
THE MONETARY POLICY COMMITTEE MEMBERS
MPC MEETING MAY 19 – 20, 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 50.00 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:
Global Economic Developments
Global economic prospects continue to weaken due to geopolitical tension
such in the Middle East, the Russia-Ukraine conflicts, pervasive policy
uncertainty which diminishes market confidence, tight financial conditions,
and escalating trade war between the United States and its major trading
partners. Theoretically, trade war, especially, in a form of tariff hike is a source
of supply shock to the global economy with the attendant loss of productivity
due to resource reallocation to non-competitive goods. According to the
International Monetary Fund (IMF)’s World Economic Outlook of April 2025,
the US tariff hike and countermeasures by their trading partners have pushed
US and global tariff rates to ‘centennial highs’.
Regrettably, this evolves at a time the world has made significant progress in
integrating the financial sector and supply chain. Though, the scheduled tariff
hike is currently on pause, the headwinds are projected to slow down global
output. The IMF outlook for April 2025 projects global growth slowing to 2.8 per
cent in 2025 and 3.0 per cent in 2026 from 3.3 per cent in 2024. The slowdown
is expected to manifest more in developed economies like the United States,
Canada, Mexico, and China, with downward adjustments to other
economies too. Growth in Advanced Economies is projected to moderate
from 1.8 per cent in 2024 to 1.4 and 1.5 per cent in 2025 and 2026,
respectively. Growth in Emerging Markets and Developing Economies
(EMDEs) is also expected to moderate from 4.3 per cent in 2024 to 3.7 and 3.9
per cent in 2025 and 2026, respectively. Growth forecast for Sub-Saharan
Africa was also revised downward to 3.8 per cent in 2025 from 4.0 per cent in
2024, with expected recovery to 4.2 per cent in 2026.
Global inflation is projected to sustain its decline and ultimately converge
back to the central banks of the Advanced Economies’s targets of 2.2 per
cent in 2026, due to expected easing of supply chain disruptions, fall in

energy prices, and labour market normalisation. Global inflation is projected
to moderate from 5.7 per cent in 2024 to 4.3 and 3.6 per cent in 2025 and
2026, respectively. This is slightly higher than the January 2025 outlook due to
the increasing upside risks to inflation. The Advanced Economies inflation is
forecast to moderate from 2.6 per cent in 2024 to 2.5 and 2.2 per cent in 2025
and 2026, respectively. The Emerging Markets and Developing Economies
inflation is also projected to sustain its descent from 7.7 per cent in 2024 to 5.5
and 4.6 per cent in 2025 and 2026, respectively. The upside risks to inflation in
these economies remain the factors I highlighted in my February 2025
Statement
such
as
exchange
rate
pressures,
inadequate
transport
infrastructure, energy shortages, geopolitical tension, and climate risks.
I, therefore, vote to hold interest rate while encouraging the Bank to remain
vigilant in monitoring the potential implication of the trade tension and
declining global inflation on the domestic economy in terms of the trade
costs and inflationary pressure. The declining domestic inflation and more
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.
Domestic Economic Developments and Outlook
The domestic economy expanded by 3.84 per cent (year-on-year) in the last
quarter of 2024 from 3.46 per cent in the preceding quarter. The drivers of the
growth are the services, industry, and agricultural sectors. Though positive,
growth is still fragile and subdued consumer demand and elevated interest
rates pose significant risks to the Nigeria’s economy. The Bank needs to keep
reviewing its tools to effectively transmit monetary policy.
Year-on-Year headline inflation declined to 23.71 per cent in April 2025 from
24.23 per cent in March 2025. The decline in inflation is attributed to average
decline in food inflation - Maize (Corn) Flour, Wheat Grain, Okro Dried, Yam
Flour, Soya Beans, Rice, Bambara beans, Brown Beans – and core inflation.
Other factors that weighed on my decision are as follows:
There is a need to monitor the outlook to domestic inflation, which is
projected to decline gradually due to improved economic and exchange
rate stability, relatively lower PMS prices, and the government temporary
waiver on import duties and levies on several essential food items. There is no
better time than now to sustain the easing of the inflationary pressure. The
monetary and fiscal authorities, therefore, must continue to strengthen
collaboration in order to find lasting solutions to food prices. While I applaud
the waiver of duties and levies on essential food items, the effect is transitory
and must be properly managed. Decisive and urgent policy action is

required to stimulate domestic production, which is effective in anchoring
long-term inflation expectation.

2. ALOYSIUS UCHE ORDU
Global Economic Developments: The May 2025 MPC meeting took place
against the backdrop of the U.S. President’s "Liberation Day Tariff," with
consequential implications for the global trading system. Designed as a
sweeping tariff targeting key imports from strategic economic rivals,
particularly
China,
the
measure
aimed
to
reinvigorate
domestic
manufacturing and signal a hardline nationalist economic agenda. Some of
the tariff increases were temporarily paused, though still well above previous
levels and the future tariff decisions remained highly unpredictable.
In practice, the tariff disrupted international supply chains, raised input costs
for U.S. manufacturers, and sparked retaliatory measures from affected
trading partners. These developments intensified trade tensions, increased
market volatility, and complicated recovery efforts in a global economy still
grappling with post-pandemic inflationary pressures and geopolitical tensions
in Europe and the Middle East.
As a consequence, the Peterson Institute for International Economics
projected a significant deterioration in the global economic outlook. Global
GDP growth is projected to slow to 2.7% in 2025 and 2.8% in 2026, down from
3.2% in 2024. This slowdown primarily results from the policy uncertainty that
has made it challenging for businesses to plan and invest, further dampening
economic activity.
In the U.S., economic growth is expected to stall, and projected to decline
from 2.5% in 2024 to just 0.1% in 2025. Inflation is anticipated to peak at
around 4.5% later in the year, and unemployment is expected to rise slightly
above 5% before improving in 2026. Financial markets have reacted
negatively to these policy changes, although consumer spending and
employment data remain relatively stable, possibly due to households and
businesses accelerating purchases in anticipation of higher prices on
account of the new tariffs regime.
In its May 2025 meeting, the Fed kept US interest rates on hold at 4.25% to
4.5% for the third consecutive meeting. The decision was based on the
heightened uncertainty with both sides of the Fed’s dual mandate — to
foster maximum employment and to tame inflation — seriously challenged. It
noted that the risks of higher unemployment and higher inflation had
increased since its last meeting in March.
Outside the U.S., the economic picture is mixed. Canada and Mexico are
experiencing significant impacts from new U.S. trade actions, with Mexico
facing additional challenges from weaker economic fundamentals and
potential revisions to the trade pact between the three countries – the

USMCA. In Europe and the UK, moderate growth is expected, supported by
coordinated debt issuance and increased defense spending.
Implications for Emerging Market Economies: For emerging market and
developing economies, the IMF’s April 2025 World Economic Outlook projects
growth of 3.7% in 2025, a slight decrease from previous years. This slowdown is
a consequence of the heightened global trade tensions which have
disrupted supply chains and dampened investor confidence. Additionally,
tighter global financial conditions have led to increased borrowing costs,
posing challenges for the EMDEs with significant external debts. Despite these
headwinds, these economies are still expected to outpace advanced
economies, which are forecast to grow at 1.4% in 2025.
However, within emerging market economies, regional performances vary.
India remains an outlier with a robust growth projection of 6.5% for 2025,
driven by strong domestic demand, infrastructure investments, and digital
advancements.
In contrast, China's growth is expected to moderate to 4.0%, hindered by
weak household consumption, a sluggish property sector, and the adverse
effects of trade policy developments. In view of softening demand, China
eased monetary policy – cutting its benchmark interest rate on May 7, the
same day that the US Fed held interest rates steady. The Chinese government
also increased liquidity by reducing the amount of money banks are required
to hold in capital reserves.
Other Southeast Asian countries are anticipated to benefit from trade
reorientation and regional supply chain shifts, while Latin America and SubSaharan Africa face more modest growth prospects due to debt
vulnerabilities and low productivity.
Domestic Developments in Nigeria: CBN Staff economic report for the 300th
MPC meeting and the World Bank’s Nigeria Development Update provide
detailed overview of recent domestic developments. Nigeria’s economic
performance has improved modestly, driven primarily by strong growth in the
services sector, especially ICT and finance, and a recovery in oil production.
Real GDP grew by 3.4% in 2024 and is projected to reach 3.7% in 2025.
However, growth remains uneven, with agriculture still lagging due to
insecurity and high input costs. The Purchasing Managers' Index (PMI)
readings suggest continued expansion in business activity into early 2025 (52.3
index points in March versus 51.4 in February), reflecting moderate optimism
among firms despite persistent challenges. Government has largely
maintained a stable macroeconomic policy mix, which has helped stabilize

the economy, though challenges remain in ensuring that growth is inclusive
and sustainable.
Monetary policy has remained tight in response to persistent inflation, which,
despite easing slightly, remains elevated and sticky. In particular, month-tomonth inflation was 24.48% in January 2025; it eased slightly to 23.18% in
February; it edged up again to 24.23% in March; and eased a bit in April.
Overall, inflation is projected to average 22.1% in 2025.
The financial and monetary sectors showed signs of tightening liquidity. Broad
money growth moderated, and private sector credit experienced a marginal
decline. The monetary base contracted, partly due to restrained central
bank liquidity injections and increased cash reserve requirements. Money
market rates trended upward, aligning more closely with the monetary policy
rate, indicating improved transmission of policy decisions. The stock market
performed positively, supported by foreign portfolio inflows and improved
investor sentiment following foreign exchange reforms.
Nigeria's external sector exhibited notable resilience in early 2025, as detailed
in the CBN Staff reports. Gross external reserves increased by 2.85% to
US$38.90 billion as of May 16, 2025, up from US$37.82 billion at the end of
March 2025. This level of reserves provides an import cover of approximately
7.6 months for goods and services, indicating a relatively strong buffer against
external shocks
The balance of payments recorded a surplus of US$1.10 billion in the fourth
quarter of 2024, a decline from the US$4.21 billion surplus in the preceding
quarter. This moderation was primarily due to a decrease in the current
account surplus, reflecting changes in trade dynamics and external
economic conditions.
In the foreign exchange market, the naira demonstrated relative stability,
attributed to the CBN's implementation of market-reflective exchange rate
policies. These measures have contributed to the narrowing of the gap
between official and parallel market rates, enhancing investor confidence,
and promoting transparency in the forex market. The CBN's continued efforts
to bolster market liquidity and maintain exchange rate stability are key to
sustaining external sector resilience.
On fiscal policy, CBN Staff assessments reflect continued improvement in
Nigeria's fiscal position, supported by increased revenue mobilization efforts
and enhanced oil receipts. Total federally collected revenue rose during the
review period, driven by improved performance in both oil and non-oil
sectors. Higher crude oil prices and stable production levels boosted oil

revenue, while non-oil revenue gains were attributed to reforms in tax
administration and enforcement, including improvements in VAT and
company income tax collections.
Expenditure levels also rose, largely due to increased recurrent spending,
particularly on wages, interest payments, and security-related expenses.
Although capital expenditure saw a slight uptick, it remains constrained by
limited fiscal space. The resulting fiscal deficit, while still present, was narrower
than in previous periods, reflecting improved revenue performance and
tighter control over discretionary spending. The government continued to rely
heavily on domestic borrowing to finance the deficit, leading to a rise in
public debt levels.
Despite the improved fiscal outlook, structural challenges persist such as low
revenue-to-GDP ratio, inefficient spending, and a growing debt service
burden. The fiscal authorities are encouraged: (a) to sustain ongoing reforms
aimed
at
broadening
the
tax
base,
enhancing
public
financial
management, and promoting fiscal transparency; (b) to strengthen fiscal
buffers and improve the efficiency of public spending; and (c) to revisit the
2025 budget parameters (e.g., oil production of 2.0 million barrels per day
and crude price of US$75 per barrel) which are no longer realistic under the
current circumstances.
Overall, there has been noteworthy improvements in the economy in the
recent past. The gap between the official and parallel foreign exchange
markets has narrowed; external reserves have increased; and headline
inflation declined in April. And, on account of the improving macroeconomic
fundamentals, Nigeria’s credit rating has been upgraded.
Nevertheless, global economic developments, marked by heightened trade
tensions, rising geopolitical uncertainty, and tighter global financial conditions
pose significant challenges for Nigeria’s macroeconomic stability and growth
outlook. With global output growth projected to slow and trade volumes
under pressure, Nigeria’s export revenues, especially from oil, face downside
risks, which could constrain foreign exchange earnings and fiscal revenues.
And, inflation remains a major concern.
Therefore, we need to remain vigilant and monitor the data, especially at this
time of heightened global uncertainty. I vote to hold the MPR, the CRR, the
Asymmetric corridor and the liquidity ratio at their current levels.

3. BALA MOH’D BELLO MoN
Opening Statement
At the 300th Monetary Policy Committee (MPC) meeting, which was held on
May 19 and 20, 2025, I voted to hold all policy rates at their current levels 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.

My decision to hold all the policy rates is hinged on the need to continue
monitoring and evaluating unfolding global economic developments. The
evolving dynamics of global trade, financial markets, and persistent
geopolitical tensions necessitate a cautious and evidence-based approach.
Notably, the Nigerian economy remains resilient as key macroeconomic
indicators continue to move broadly in the desired direction with a positive
short-to-medium term outlook, despite persistent shocks.
Key Considerations
Recent data from the National Bureau of Statistics (NBS), indicate a
moderation in inflationary pressures. Headline inflation (year-on-year)
declined to 23.71 per cent in April 2025, from 24.23 per cent in the preceding
month. On a month-on-month basis, inflation also decelerated to 1.86 per
cent in April 2025, from 3.9 per cent in March. Both food and core
components also moderated, with food inflation easing to 21.26 per cent in
April 2025 from 21.79 per cent in March and core inflation declining to 23.39
per cent, from 24.43 per cent in the previous month.
The current policy rate ensures positive real yields (MPR less headline
inflation) which would bolster investor confidence and help anchor inflation
expectations of economic agents. Sustained fiscal and monetary policy
coordination, with improvements in domestic agricultural output, are
expected to further moderate price pressures. Additionally, the relative
stability in the foreign exchange market supports the outlook for inflation
through reduced pass-through effects.
Real GDP (year-on-year) grew by 3.84 per cent in the fourth quarter of 2024,
compared with 3.46 per cent in the preceding quarter. This improvement was
driven by both the oil and non-oil sectors, with the services sector being the

major contributor. The growth momentum is expected to persist over the
medium-term, driven by the coordinated mix of ongoing fiscal reforms and
monetary policy initiatives. This growth trajectory is also evident in the robust
leading economic indicators released by the CBN and NBS.
External sector performance has also improved, with gross external reserves
recording a significant increase and the balance of payments returning to a
surplus in the fourth quarter of 2024. Banking sector indices also show
robustness with sound financial indicators and improved credit to the real
sector of the economy despite the tight stance of monetary policy. The
growth in credit is expected to further boost productive activities, create jobs,
and strengthen domestic resilience.
On the global front, headwinds persist and must not be ignored. The
International Monetary Fund (IMF) in recognition of the uncertain global
policy environment and emerging risks, downgraded its global output growth
forecast to 2.8 per cent in 2025 and 3.0 per cent in 2026, compared with 3.3
per cent in 2024, due to the uncertain policy environment. As I noted in my
February 2025 statement, continued implementation of policies that reinforce
Nigeria’s macroeconomic stability remains a priority, to enhance resilience
against external shocks.
Concluding Remarks
The positive trajectories of key economic variables such as inflation, output
growth and exchange rate are encouraging and should be preserved. In my
view, it is imperative to sustain and build on these gains, especially in the face
of ongoing global headwinds. This underscores the need for balanced policy
decisions that uphold price stability while fostering economic growth. Given
the current dynamics, I am convinced that any adjustments to the existing
stance of monetary policy at this time could trigger unnecessary disruptions.
Therefore, I vote to maintain the current stance of monetary policy.

4. BANDELE A.G. AMOO
Having reviewed 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 resilience witnessed within the global economies in the recent past
continued through the first quarter in 2025. The uncertainty in the global
growth outlook was further heightened during the past few months of 2025
due to geopolitical tensions, elevated global interest rates, and the trade
frictions coming from the on-going tariff war. Global economic uncertainty
has increased since the introduction of reciprocal Tariff Policy by the United
States. The trade frictions have exacerbated global economic fragmentation
and drastically reduced world trade volume. The prevailing global
uncertainty has led some Central Banks to opt for a cautious approach to the
future path of monetary policy. However, the outlook is subject to downside
risks, including the dampening effect of monetary tightening on economic
activity, resurgence of protectionism, and heightened geopolitical tensions.
Other 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.
The current global disinflation path was constrained by imposition of
additional tariffs initially by the US and retaliatory responses which jointly
pushed up long-term inflation expectations in some Emerging Market
Economies (EMEs). The downside risks have, however, persisted as escalating
geopolitical tensions continue to further disrupt commodity prices, and
increase fragmentation of trade networks.

2. Domestic Macroeconomic Developments and Outlook
Domestically, growth continued to be moderate as expected. Data from the
National Bureau of Statistics (NBS) showed that Nigeria’s Gross Domestic
Product (GDP) grew by 3.84% (year-on-year) in real terms in the fourth quarter
of 2024. This growth is higher than the 3.46% recorded in the fourth quarter of
2023. The GDP performance in the fourth quarter of 2024 was driven mainly
by the Services sector, which recorded a growth of 5.37% and contributed
57.38% to the aggregate GDP.
The banking sector performance continued to be strong and resilient. Total
bank assets recorded 22.35 percent growth (N30.83 trillion) as at the end of
April 2025 relative to April 2024. Industry credit also increased by N5.99 trillion
or 10.89 percent during the same period. Bank liquidity remained adequate
in April 2025, as reflected by a high ratio of liquid assets to third-party funds at
50.6%. The Capital Adequacy Ratio (CAR) increased to 15.55% in April 2025
from 10.81% in April 2024, thereby enabling banks to adequately manage
their risk-weighted assets and support credit growth. Meanwhile, nonperforming loans (NPL), as a proxy of credit risk, rose by 0.1% to 5.6% in April
2025. The latest stress tests indicated solid banking industry resilience against
various risks, supported by efficient macro-prudential framework for ensuring
profitability 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 performance engendered positive investor sentiments
for the Nigerian economy, particularly within the fixed income instruments’
corridor. The Nigerian equities market was bullish for the second continued
month in May 2025, with the benchmark NGX All-Share index (ASI)
appreciating by 5.62% on monthly basis. This feat emphasized strong investor
appetite for domestic equities especially in sound corporate stocks,
stimulated by impressive dividend pay-out by blue-chip companies.
Accordingly, there appeared to be a shift to selective duration plays by
investors, as they interrogate a blend of liquidity dynamics, auction outcomes
and macro signals. In the medium term, we expect the prevailing trend to
persist, as investors continue to realign their portfolios as situation unfold in
monetary, fiscal and macroeconomic developments, specifically Nigeria’s
Q1 2025 GDP numbers.
The
strong
external
sector
performance
continued,
indicating
an
improvement in the accumulation of reserves. Nigeria’s Balance of Payments
(BOP) position remains stable to support our external sector stability. Portfolio
inflows remained high, recording positive net inflows as at end-April 2025. The

exchange rate has remained broadly stable with some minor upside and
downside movements. External reserves stood at US$39.01billion at mid-May
2025, from US$38.35billion at mid-Feb 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 expected reduction in import demand
pressures arising from the full deregulation of the downstream oil sector,
reduced petroleum products importation regime, increased inflows and other
subsisting measures deployed by the CBN.
Data from the NBS showed that the year-on-year headline inflation rate for
April 2025 decelerated to 23.71% from 24.23% in March 2025 due to a
slowdown in food and core inflation. Food inflation slowed to 21.26% while
core inflation dropped to 23.39 in April 2025. Driving factors for food inflation
were improved security around the farming communities; seasonal factors;
moderation in transport costs; as well as slowdown in processed food imports.
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. Lower energy prices would also help to fasten the
disinflationary process, potentially facilitating monetary policy easing, which
may further support sector investments. Monetary policy restraint is hereby
required given the government’s recently demonstrated commitment to
fiscal consolidation.
3.0 My Concern
In my view, the May 2025 composite PMI points data sent a mixed signal. On
the one hand, stronger demand, rising output, and increased purchasing
activity - all point to a recovery taking shape. On the other hand, persistent
inflation, cost pass-through limitations, wage pressure, and vacillating
sentiment raise red flags about the durability of that recovery. The growing
gap between output and input prices is becoming a structural threat to
corporate profit margins and, eventually, to employment, wealth creation,
corporate social responsibility and investment. With a composite PMI at 52.2
index points, Nigeria’s economy is indeed growing. However, if margin
pressures are not addressed through fiscal support, FX stability, and
productivity reforms; growth may come at the cost of corporate resilience
and macroeconomic stability. Consequently, this is a moment to recalibrate
policy. This is one of the reasons I took the decision to hold the policy rates.
It’s gladdening to note that the Nigerian economy continues to witness
positive macro-economic developments in recent time across different
sectors. Some of which 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 exchange rate; gradual
moderation in the prices of Premium Motor Spirit (PMS) and AGO; planned
recapitalisation of the Bank of Agriculture; increase in social safety
programmes to further boost aggregate demand to reduce manufacturers’
outcry of unsold stocks; 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.
Given the above-mentioned, I believe that the MPC actions will continue to
contain demand-side pressures and moderate the second-round effects
coming from supply shocks. I also 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 outlook dependent and data driven. As inflation becomes firmly
anchored, the MPC will reassess the possibility for a gradual easing in the
current policy stance.
4.0 Conclusion
The on-going positive innovations in the financial sector will help to promote
digital payments efficiency and provide fintech solutions to enhance
financial inclusion and reduce reliance on cash-based transactions. This will
help to strengthen the transmission mechanism of monetary policy and help
improve CBN monitoring and management of system liquidity. It will also help
to determine when to augment our existing sterilization toolkit depending on
the banks’ net open positions. The fiscal authority, hopefully, will complement
all these by doing more in tackling security challenges and further upgrading
infrastructure facilities to promote domestic food production and other
economic activities.

5. EMEM USORO
At the Monetary Policy Committee (MPC) held on May 19 -20, 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 a prudent and forward-looking assessment of prevailing
economic reality and risk. In reaching this decision, I was guided by the need
to balance the goal of price stability and safeguard the momentum of
macroeconomic recovery.
My considerations are as follows:
Recent global economic dynamics reflect slower trade and investment
flows, triggered by policy uncertainties, trade frictions, and geopolitical
tensions. Consequently, business activities have softened, especially in the
services sector, and global growth forecasts have been revised
downward. Hence, the International Monetary Fund (IMF) now projects a
slower pace of global expansion in 2025.
While global inflation has eased in some advanced economies due to
tighter monetary policies and lower energy costs, disinflation has been
uneven across emerging markets. In many jurisdictions, such as Nigeria
and peers like Egypt and Kenya, inflation remains elevated driven by
structural factors.
Global commodity markets have presented mixed signals. Particularly,
crude oil prices remain under pressure due to increased supply and weak
demand, posing risk to Nigeria’s fiscal revenue projection, public debt
profile, and external position.
Looking ahead, the balance of risks to the global economic outlook is
tilted to the downside. Inferences on the likely implications for the
domestic economy reveal several external headwinds, including trade
protectionism, regional conflicts and other macro-financial vulnerabilities.
Domestically, the economy is showing signs of relative stability with
inflation appearing to decelerate, stability in the foreign exchange
market, banking system resilience, easing financial conditions, and
narrowing output gap. However, several risks still persist.

For instance, despite observed moderation in headline inflation on the
back of sharp drop in food inflation, core inflation has edged higher,
reflecting pass-through from FX pressures and higher utility costs, a clear
indication of lingering underlying supply-side inflation risks.
In addition, inflation expectations remain elevated due to structural
constraints, particularly food supply and energy infrastructure, potential
second-round effects from fiscal surprises. These uncertainties reinforce
the need to maintain a cautious monetary stance.
Threats to fiscal sustainability amid tightening fiscal space still exist, given
declining oil production, volatile oil prices and rising debt service costs.
More so, additional dollar-denominated debt issuance in the global
environment could compound foreign currency risk unless appropriately
hedged or linked to export generating assets.
The outlook for the domestic economy is moderately positive, with nearterm output expected to remain positive and upward-trending with
support from fiscal and FX reforms. However, inflation is expected to rise
on the back of seasonal factors, heightening insecurity and exchange
rate pass-through. The level of external reserves is projected to increase
due to reduced external debt service and the resumption of naira-forcrude agreement.
Albeit this outlook is beclouded with headwinds, including energy supply
challenges, especially the recurring collapse of the national electricity
grid, and supply chain disruptions. All these could constrain business
activities, transportation and trade, and thus exacerbate inflationary
pressures. The decline in global oil prices could negatively impact oil
export revenues, reducing the oil sector’s contribution to growth. Thus,
continued efforts to boost investors’ confidence, both external and
domestic, will be critical to sustaining momentum.
In light of the complex interplay between global shocks, domestic price,
and FX stability, expansionary fiscal impulses and fragile debt dynamics,
my colleagues and I are committed to an agile approach in our policy
responses, and work with other arms of government to ensure that
macroeconomic policy works in concert towards Nigeria’s economic
recovery. Accordingly, the rationale behind retaining the current policy
stance rests not only in accommodating complementary fiscal efforts but
also to guard against sudden capital outflows and the de-anchoring of
inflation expectations.

6. LYDIA SHEHU JAFIYA
Global growth has remained relatively stable. However, ongoing geopolitical
crises and trade tensions, particularly the implementation of a new tariff
regime by the United States and reciprocal measures by the affected
countries have heightened concerns about a potential deterioration in
growth fundamentals over the near to medium term. As global uncertainties
persist, growth is projected to decline from 3.3 per cent in 2024 to 2.8 per cent
in 2025, before edging up to 3.0 per cent in 2026 (World Economic Outlook
(WEO), April 2025). Similarly, output in Advanced Economies is forecast to
moderate in 2025 reflecting increasing policy uncertainties and trade
tensions. In Emerging Markets and Developing Economies (EMDEs), growth is
also expected to decelerate, driven by elevated inflation, exchange rate
pressures, and infrastructural challenges.
On global inflation, central banks have leveraged their credibility to guide
expectations back towards target levels. In the Advanced Economies,
inflation continues to trend downward towards the long-run objectives.
However, the ongoing retaliatory tariffs and geopolitical disruptions could
affect supply chains, potentially leading to renewed inflationary pressures.
Consequently, global headline inflation is projected to moderate more
slowly, reaching 4.3 per cent and 3.6 per cent in 2025 and 2026, respectively,
down from 5.7 per cent in 2024. In EMDEs, price moderation is expected to
proceed at a slower pace, due to the impact of exchange rate pressures
and structural rigidities.
Global trade is projected to dip sharply 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 significant downgrade, as reported in April 2025 WEO, reflects intensified
tariff barriers and increasing policy uncertainties, which are adversely
affecting global trade flows.
THE DOMESTIC ECONOMY
Real Gross Domestic Product (GDP) (year-on-year) increased by 3.84 per
cent in Q4 2024 from 3.46 per cent in Q3 2024. The growth in output was led
by non-oil GDP which rose to 3.96 per cent in Q4 2024 from 3.37 per cent in
Q3 2024. Oil GDP growth slowed to 1.48 per cent in Q4 2024 from 5.17 per
cent in Q3 2024. Overall, growth was supported by strong performance
across Agriculture, Industry and Services sectors. Business activities remained
upbeat in April 2025, as the Composite Purchasing Managers' Index (PMI)
stood at 52.2 index points from 52.3 index points in the preceding month. The

overall expectations index also revealed strong optimism by firms in the
economy, promising an improved growth outcome in Q1 2025.
Crude oil production declined due to heightened concerns over global
demand, driven by intensifying US-China trade tensions and fears about
potential excess supply. Domestic crude oil production stood at 1.49 million
barrels per day (mbpb) in April 2025, approaching the OPEC production
quota of 1.50 mbpd. This performance reflects enhanced security measures
and recent upgrades to crude oil mining infrastructure.
Headline inflation (year-on-year) declined to 23.71 per cent in April 2025 from
24.23 per cent in March 2025, owing to the slowdown in food and core
inflation. Core inflation dropped to 23.39 per cent in April 2025 from 24.43
percent in March, driven mainly by seasonal factors, while Food inflation
(year-on-year) slowed to 21.26 per cent in April 2025 from 21.79 per cent in
March. The future path of food inflation will depend on the sustained impact
of the 150-day tariff exemption on staple grain imports, as well as improved
farm access driven by better security in key agricultural zones. For core
inflation, the expected strengthening of the exchange rate and declining
energy costs are likely to be influential factors.
Monetary aggregates showed an uptick with Broad Money (M3), increasing
by 5.07 per cent year-to-date in April 2025. 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) remained within macroprudential
thresholds, suggesting that the system is stable, sound and resilient.
CONSIDERATIONS FOR VOTING
The 300th meeting of the Monetary Policy Committee (MPC) held at the
backdrop of declining Headline inflation (year-on-year), including its
components of Food and Core inflation; upward growth trajectory; stability in
the foreign exchange market; and resilient external sector despite falling
crude oil prices.
It is evident that the lagged effects of the restrictive monetary policy stance
over the past one year have begun to kick-in with notable impact on the
disinflation process and helping to anchor inflation expectations. Despite the
progress with disinflation, persistent risks to inflation remain, stemming from
both monetary and structural factors that continue to affect both demand
and supply side dynamics.

While inflation is gradually returning to target levels in Advanced Economies,
the inflationary consequences of ongoing tariff wars pose significant upside
risks. In response, central banks may recourse to further restrictive measures in
a bid to safeguard their price stability mandate, with adverse implications for
capital flows into Emerging Markets and Developing Economies, including
Nigeria.
The recent global developments particularly the trade tensions are expected
to weigh on global growth. Although Nigeria has not been directly impacted
on account of the proactive structural reforms that had taken place, it has
however, been indirectly affected by falling crude oil prices – the main
foreign exchange earner and source of fiscal revenue.
Indeed, fiscal policy remains aligned to structural transformation of the
economy, inward looking strategies, and enhanced coordination with the
monetary authority in reducing inflation and accelerating economic growth.
Efforts to diversify the economy and exploit regional trade opportunities are
being strengthened to boost trade.
The focus of Government is on accelerated domestic revenue mobilization,
crowding-in of the private sector, greater push for diaspora remittances,
financial inclusion, and increasing investment in infrastructure, including the
real and digital economies, amongst others. Also, the imminent passing of the
tax reform bill has the potential to increase tax revenues and help close fiscal
gaps.
It is noteworthy, that the country’s commitment to macroeconomy stability
has earned Nigeria a B-stable rating from the Fitch Ratings during its last
assessment,
a
testament
to
investors’
confidence
in
Nigeria’s
macroeconomic management.
In the light of the foregoing, I voted to maintain policy parameters at their
extant levels, while monitoring the risks and uncertainties around domestic
price 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 per cent.
4. Retain the Liquidity Ratio at 30.00 per cent.

7. LAMIDO ABUBAKAR YUGUDA
Global Macroeconomic Developments
Owing to continuing uncertainty associated with the implementation of US
trade tariffs, the IMF has revised its forecast of global growth to 2.8 percent in
2025 and 3.0 percent in 2026.
Inflation continues to fall across the major economies, albeit at a slower than
expected rate, and forecasts for global inflation have been slightly revised
downward to 4.3 percent and 3.6 percent in 2025 and 2026, respectively, on
account of the possible effects on global trade of the ongoing tariff
negotiations between the US and many of its trading partners. The US Fed has
retained its policy rate, while the ECB and the BoE adjusted their rates
downward by 25 basis points each. Crude oil prices are expected to soften
on account of slower global growth forecast.
Investor concerns over the relative risk profile of US government bonds led to
increased financial market volatility in early April 2025 as larger than
expected US trade tariffs were announced and investors priced in the
prospects for higher inflation and weaker output growth over a longer
horizon. These worries and the subsequent downgrade of US credit rating by
Moody’s Ratings are beginning to weigh down on the US dollar’s safe haven
status. At the end of April 2025 sovereign bonds of many euro area countries
posted negative yield spreads, with Germany being the highest at minus
173.60 basis points, versus US sovereign debt of similar maturities.
Domestic Economic Developments
Real output grew by 3.84 percent in Q4 2024 and is projected to grow by 4.17
percent in 2025 owing to improvements in the oil sector and the expected
impact of ongoing fiscal reforms. The composite PMI increased to 52.3 index
points in March 2025 up from 51.4 points in February 2025, buoyed by
expansion in agriculture, industry and services.
Headline inflation declined to 23.71 percent in April 2025 from 24.23 percent
in March. Both food and core inflation moderated to 21.26 percent and 23.39
percent respectively, as food and fuel prices continued to decline. This is a
welcome development. However, these levels are too high and the
concerted efforts of both the monetary and fiscal authorities are required to
reduce inflation significantly.
Broad Money (M3) declined in March 2025 by 0.77 percent to ₦114.22 trillion
relative to end-December 2024. M1 declined by 0.68 percent while M2

increased by 0.76 percent to ₦38.55 trillion and ₦114.20 trillion, respectively.
Net foreign assets increased by 14.34 percent while net domestic assets
decreased by 15.16 percent as both net claims on Government and claims
on other sectors decreased by 4.73 percent and 2.25 percent, respectively.

The current account surplus moderated in Q4 2024 to $3.80 billion owing to a
decline in the goods account caused by an increase in non-oil imports and a
decline in oil export receipts. The external reserves increased to $38.72 billion
at end-April 2025, enough to cover 7.60 months of imports of goods and
services.
Government revenue has recorded a significant increase during the first two
months of 2025, rising by 28.5 percent over the corresponding period in 2024.
Expenditure rose by 32.49 percent during the same period and the
corresponding deficit widened by 33.94 percent.
Policy Discussion and Key Risk Factors
The improvement in Nigeria’s macroeconomic situation highlighted earlier in
the year continues into the second quarter of 2025. Gross external reserves
have increased, buoyed by improving receipts from diaspora remittances.
The current account of the balance of payments remains in surplus, while the
stability of the foreign exchange market is further enhanced by the
progressive tightening of the spread between the official and bureaux de
change windows. Monetary conditions have also improved significantly, and
inflation is beginning to trend down.
While this paints a gradually improving picture on the domestic front, the risk
outlook on the global front remains a concern. Significant concern and
uncertainty have continued to trail the implementation of the new US trade
policy that has seen across the board increases in trade tariffs as well as
pauses, announcements of bilateral negotiations and unilateral imposition of
additional tariffs on selected industries and countries.
While many of the countries targeted for higher tariffs had announced
retaliatory measures, the implementation pauses from the US side have, for
the most part, been reciprocated to allow bilateral negotiations determine a
more reasonable tariff policy. It is still very unclear what the tariff situation is
going to look like at the end of 2025 and what the macroeconomic
implication for various countries and the global economy will be.
Understandably the trade policy uncertainty has spooked financial markets,
forced international investors to reassess the US market, exacerbated the
weakness of the US dollar against major trading currencies, and earned the
US a credit rating downgrade from one of the top global credit rating

agencies. Consequently, US bond yields have risen significantly, forcing
global investors to reassess and realign their portfolios.
Added to these concerns are the developments in the oil market where
supply considerations and slower global growth forecast are dampening oil
price expectations with potential significant implications for government
revenues and foreign exchange supply.
Given all these moving parts, how should monetary policy respond given the
not too subtle role played by foreign capital flows in stabilizing the foreign
exchange market in Nigeria? In my opinion, the Monetary Policy Committee
(MPC) needs to sustain the current tight monetary policy to address the
underlying inflationary pressure and ensure that all available tools are used to
address the primary causes of excess liquidity in the system. In addition, the
MPC
must
encourage,
enhance,
and
deepen
the
current
policy
coordination between the monetary and fiscal authorities, while also ensuring
that monetary policy continues to be data driven. Finally, the MPC must
commend the current efforts to boost external buffers by growing the foreign
exchange reserves through strategic investment in locally produced gold as
well as by attracting remittances from Nigeria’s large diaspora community.
Decision
In view of the foregoing, I voted to keep all the monetary policy parameters
unchanged as follows:
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.

8. MUHAMMAD SANI ABDULLAHI
My Vote
The 300th meeting of the Monetary Policy Committee (MPC) marks a pivotal
institutional milestone, reflecting the historical evolution and trajectory of
monetary policy implementation in Nigeria. Its significance is underscored by
shifts in policy and implementation frameworks, as well as broader
macroeconomic recalibrations driven by both global and domestic
developments over the past decades.
Notable progress has been made in efforts to rein in inflation and stabilize the
foreign exchange market. Recent data confirm improving inflation dynamics
and bolster confidence in the current policy direction. While persistent
inflationary pressures and exchange rate volatility persist as core policy
challenges, the Committee remains committed to a forward-looking stance,
continuously calibrating its policy to ensure stability. This commitment is
evidenced by the continued application of targeted monetary and
complementary fiscal interventions aimed at mitigating macroeconomic
instability and supporting a path toward sustainable recovery.
Evidence of broad-based inflation moderation is emerging, with improved
headline inflation across states in Nigeria. The exchange rate has largely
stabilized; money market rates have been sufficiently anchored within the
standing facility corridor and Nigeria’s external sector posted favourable
outcomes for two consecutive quarters. The lagged effects of previous
monetary policy tightening are still permeating through critical sectors of the
economy and influencing macroeconomic indicators.

In this context, while the objective of ensuring long-term macroeconomic
stability remains paramount, I believe that further tightening may be
counterproductive at this stage. With the Monetary Policy Rate at 27.5% and
the Cash Reserve Ratio at an elevated 50%, a prudent course of action
would be to pause and allow the full effects of prior interventions to
materialize over the medium to long term. In effect, I voted to hold all
parameters constant. This decision is supported by current inflation forecasts
and trends in consumer expectations. It also aligns with conventional
monetary policy principles, which advocate caution when early indicators of
macroeconomic stability begin to emerge.

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
To provide an overview of the prevailing economic landscape that informs
my policy decision, key macroeconomic indicators are presented in Table 1.
Table 1: Overview of Key Macroeconomic Indicators (April 2025)
Indicator
Value (April 2025, unless otherwise specified)
Headline Inflation (Yearon-Year)
23.71% (down from 24.43% in March 2025)
Month-on-Month
Inflation
2.66% (down from 2.98% in March 2025)
Composite PMI
52.2 (5th consecutive month of expansion)
Overall
Business
Confidence Index
Current Month: 42.8; Next Month: 35.8; Next 3
Months: 25.3; Next 6 Months: 22.3
Overall
Household
Sentiment Index
-15.3 (worsening from March)
Overall
Capacity
Utilization
56.9%
Gross External Reserves
US$38.90 billion (as at May 16, 2025; up 2.85%
from end-March 2025)
Non-Performing
Loans
(NPLs)
5.6% (above prudential threshold of 5.0%)
Inflation Trends and Dynamics
In 2025, inflationary dynamics differ from 2024's demand-side pressures and
supply shocks. The MPC has continued to deepen its evaluation and
decomposition of the structural and cyclical components of Nigeria’s
inflation and recalibrating its policy mix accordingly. This enhanced inflation

decomposition has supported more targeted policy measures and improved
policy transmission. The principal objective remained the decisive anchoring
of inflation expectations and the pursuit of a sustained disinflationary path.
Accordingly, the Committee adopted a broad-spectrum policy response
tightening monetary conditions to dampen aggregate demand while the
FGN simultaneously deployed structural and administrative measures to
address supply-side rigidities.
Despite varying transmission speeds, disinflation was observed across
headline, core, food, and imported inflation, indicating policy effectiveness
despite persistent divergent drivers.The data from the National Bureau of
Statistics, using the 2024 base year, showed that headline inflation (year-onyear) moderated slightly to 23.71% in April 2025, down from 24.43% in March
2025, marking a continuous downward trend. The food and core
components stood at 21.26% and 223.39%, respectively in April 2025,
reflecting
current
economic
realities.
Month-on-month
inflation
also
decreased to 2.66% in April 2025, down from 2.98% in March. Imported food
inflation also moderated to 20.20% in April from 21.46% in March 2025.
Imported food inflation has continued to moderate since December 2024,
largely reflecting the lagged effects of foreign exchange market stability that
began in May 2024. In addition, there have been increased foreign
exchange turnover signalling deepening of the FX market following the
adoption of the B-Match system and the FX Code of Conduct.
Despite this moderation in the rebased headline inflation rate, analysis of Staff
Household Expectation Survey (HES) and Business Expectation Survey (BES) for
April 2025, showed that a notable disparity exists between the inflation figures
and public perception. Most households (69.4%) and businesses (70.5%) still
perceive current inflation as "High". This indicates that disinflation, while
present, has not yet translated into a public perception of "low" or "moderate"
prices, as the cumulative impact of past increases remains deeply felt. This
analysis cautions against premature monetary easing, as it risks reinforcing
negative perceptions and undermine the disinflationary path.
The economy faces significant cost-push pressures that monetary policy
alone cannot fully address. Energy, transportation, foreign exchange rates,
and interest rates are consistently cited as key inflation drivers by both
households and businesses. Firms also identify insecurity and raw materials as
significant drivers. PMI data confirms input prices exceed output prices across
all sectors, indicating businesses are absorbing higher costs.
This suggests monetary policy's direct leverage over these structural/supplyside factors is limited. Further tightening risks disproportionately burdening
businesses and households through increased borrowing costs, without

effectively addressing these root causes. Maintaining current policy
parameters avoids exacerbating existing constraints and highlights the need
for complementary fiscal and structural measures.
Looking ahead, improvements in the domestic supply of food, petroleum
products, and energy inputs could provide additional support for the
Committee’s disinflation agenda, particularly on the cost-push front.
Furthermore, scaling up targeted initiatives such as upstream investment
incentives, trade facilitation, export financing, and FX repatriation frameworks
will enhance foreign exchange earnings, particularly from oil and gas exports
and an increasingly diversified base of non-oil exports. These measures are
expected to strengthen external sector buffers, bolster FX market liquidity,
and foster a more stable and predictable exchange rate environment.
Expanding the supply of autonomous FX inflows can contribute to the
anchoring of market expectations, reduce pressure on the official FX window,
and improve the effectiveness of monetary policy transmission through
enhanced exchange rate credibility.
As we enter the second half of 2025 and prepare for 2026, maintaining the
downward trajectory of headline inflation will remain a key priority for
monetary policy.
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 at a slower pace 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 surplus of US$1.10 billion in the
fourth quarter of 2024, compared with US$4.21 billion in the preceding
quarter, on account of moderation in current account surplus. Gross external
reserves increased by 2.85 per cent to US$38.90 billion as at 16th May 2025,
from US$37.82 billion at end-March 2025, providing an import cover of 7.6

months for goods and services and highlighting the stability of the external
reserves at this time. Despite the potential risks posed by global economic
fragmentations to key corridors of foreign exchange inflows to Nigeria the
outlook for the naira exchange rate shows that decline in crude oil prices
could exert additional pressure on the exchange rate.
Other Developments in the Economy
In the fourth quarter of 2024, real GDP expanded by 3.84 percent year-onyear, up from 3.46 percent in Q3 2024. This growth was primarily driven by the
Services sector, which saw robust growth of 5.37 percent, significantly
boosting overall output. The composite Purchasing Managers' Index (PMI)
indicated that business activities expanded at a slower pace in April 2025,
with respect to the benchmark index, as the Composite Purchasing
Managers' Index (PMI) was 52.2 index points, compared with 52.3 index points
in March 2025. This is attributed majorly to growth in industry, services and
agriculture sectors, despite marginal input cost pressures. Thus, continued
growth in overall economic activities, as reflected in industry and services
sectors, indicates a positive outlook for GDP growth in Q2 2025. The relative
stability in the foreign exchange market is expected to mitigate the impact of
high input costs on businesses and enhance competitiveness.
Monetary base and Broad Money liabilities rose by 5.07% to ₦119.11 trillion at
end-April 2025, relative to the level at end-December 2024. This expansion
reflects rising liquidity in the banking system, which could feed into aggregate
demand. We have taken proactive liquidity sterilization measures to address
the prevailing liquidity conditions in the banking system and to reinforce the
impact of the prevailing high Monetary Policy Rate (MPR). This is germane in
order not to risk undermining the effectiveness of monetary policy
transmission. Additionally, improved coordination with fiscal authorities could
mitigate inflation from the supply side.
The banking sector remains robust, continuing to support economic activities,
with non-Performing Loans (NPLs) at 5.6 per cent, which is above the
prudential threshold of 5.0 per cent. The rise in NPLs is attributable to the
reclassification of loans during the annual risk assets examination.
Notwithstanding, the Central Bank remains vigilant in ensuring the banking
system’s stability and soundness.
The fiscal outlook remains stable, underpinned by ongoing efforts to rebuild
fiscal buffers and supported by improved oil production, favourable crude oil
prices, and recent structural reforms including fuel subsidy removal and
exchange rate unification which have collectively enhanced nominal
revenue performance. These measures have contributed to a more resilient

fiscal framework. However, considering prevailing uncertainties in the global
oil market and potential price volatility, strategic prioritization of public
expenditure will be critical to achieving improved budget execution and
fiscal consolidation in 2025.
In conclusion, my decision to vote to maintain all policy parameters is
reinforced by current economic indicators, specifically, trends in core and
food inflation, inflation expectations, and a firm commitment to ensuring
price stability and fostering long-term economic growth, which collectively
suggest that the existing policy stance remains appropriate. Although
inflation remains elevated, the real interest rate remains positive. In this
context, maintaining the current policy parameters would provide the
Monetary Policy Committee with the necessary headroom to assess the
lagged effects of prior rate adjustments, consistent with the well-established
lags in monetary policy transmission. This decision would also facilitate a
period of consolidation for businesses and households, which are currently
contending with elevated borrowing costs and persistent price pressures. This
pause would allow for a more complete evaluation of the cumulative impact
of earlier tightening measures, particularly as headline inflation continues to
moderate gradually but remains above the target range.

9. MURTALA SABO SAGAGI
Context
Nigeria continues to grapple with the large-scale economic mismanagement
of the last decade. Today, even though global inflation and growth
prospects are on positive trajectory, recent moderation of inflation in Nigeria
is still fragile. However, the resolve of the MPC to use available tools to tame
inflation has begun to generate international recognition leading to the
recent county’s upgrade by JP-Morgan and Fitch Ratings. The renewed
confidence in the country when backed by coherent monetary-fiscal
coordinated responses are likely to further insulate the economy from shocks
and lay solid foundation for stability and sustainable inclusive growth.
Global and Domestic Environments
Trade tensions linked to US tariff and regional conflicts are significant sources
of global volatility since the beginning of 2025. In particular, the effect of the
tariff war is widespread with projected global growth expected to moderate
to 2.8 per cent in 2025, lower than the 3.3 per cent projected by the IMF.
Dynamics in the two biggest economies- USA and China, will continue to
shape global growth and inflation expectations. The US economy contracted
by 0.2% in Q1 2025, indicating low government and consumer spendings as
well as productivity related challenges. This, potentially, would result in a
weaker dollar which is expected to reduce debt service costs for Dollardenominated debts in developing countries, thereby improving fiscal space if
properly managed. In spite of the trade tension, China’s GDP is expected to
grow by 4.5% in 2025, slightly higher than earlier projected while its exports is
projected to increase by 1.1%. For the Emerging Market Developing
Economies (EMDCs), growth is projected at 3.7 lower than the 4.2 per cent
earlier projected.
The relative stability in energy prices and noticeable improvement in supply
chain largely shaped global inflation expectations. The IMF projected global
inflation to moderate to 4.3 per cent in 2025 from 5.7 per cent in 2024. In the
Advanced Economies, Inflation is forecast to decline while moderation is
expected in the US and China. In the EMDCs, inflationary pressures is also
expected to decline in 2025 mainly due to the effects of the previous tight
monetary responses. It is therefore reasonable to assert that even with the
global tensions and new headwinds, the global outlook in terms of growth
and inflation will likely to remain positive in 2025. This assessment inform the
recent accommodative policy actions of many central banks. In Africa,
Nigeria, South Africa, Egypt, Kenya, and Ghana have all maintained positive
real interest rates in the first quarter of 2025 due to the past rate hikes. What is
critical at the moment is whether African countries, especially Nigeria, can

effectively utilize this momentum to address past legacy issues and deal with
emerging headwinds to unlock growth potentials needed for long term
stability and prosperity.
At the moment, even with the recent rebasing exercise in Nigeria, inflation,
even though moderating, still remains elevated. Nigeria’s year-on-year
headline inflation rose to 24.23 per cent in March 2025 from 23.18 per cent in
February before it subsided to 23.71 in April. Also, the Real GDP grew by 3.84
per cent (year-on-year) in the fourth quarter of 2024 from 3.46 per cent in the
preceding quarter indicating a measure of economic resilience. In essence,
the rate of growth is inadequate to guarantee medium to long term stability
and revenues. Consequently, debt accumulation has become a norm. The
total public debt increased in Q4 2024 to US$94,225.10 million compared with
US$88,892.43 million in Q3 2024. Debt servicing for this massive stock of foreign
debt, places significant pressure on foreign exchange and reduces fiscal
space to stimulate growth. In spite of this, there were certain gains from the
ongoing reform that should be consolidated and concerted efforts are
required to overcome legacy issues.

Major Considerations
i.
Foreign reserve: Gross external reserves rose to US$40.19 billion at endDecember 2024 compared to US$33.22 billion at the close of 2023. At
the end of April, 2025 the external reserves increased to US$38.72 billion
which could effectively cover up to 7.60 months of import for goods
and services.
ii.
Debt servicing: There has been a reduction in debt service from 97
percent to 68 percent, with commitment to further reduce debt–torevenue ratio and free up resources for critical investments.
iii.
Inflation: the rate of increase in inflation has been moderated.
iv.
External Balance: a Balance of Payments (BOP) surplus of US$6.83
billion was recorded for the 2024 financial year, from the deficits of
US$3.34 billion in 2023, and US$3.32 billion recorded in 2022. The current
and capital account also recorded a surplus of US$17.22 billion in 2024,
driven by a goods trade surplus of US$13.17 billion.
v.
Remittance inflows: In 2024, personal remittances rose by 8.9 percent to
US$20.93 billion. International Money Transfer Operators (IMTOs) inflows
rose by 43.5 percent to US$4.73 billion, up from US$3.30 billion in 2023,
reflecting stronger engagement from the Nigerian diaspora.
vi.
Value of currency: the value of the naira has been relatively stable
even though it is still considered undervalued. It is projected that the
naira would appreciate to N1, 450 per US dollar by the end of 2025.

Conclusions
On the whole, a measure of successes from the ongoing fiscal and monetary
policy changes have begun to manifest. The recent country’s assessment by
JP-Morgan and Fitch Ratings were both positive. With the current tight
monetary stance, there is a likelihood of further moderation in inflation.
Therefore, 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
Fiscal policy actions are needed to translate moderation in inflation into
tangible results in terms of growth and jobs. There is the urgent need to look
inward to generate stable and inclusive economy using a combination of the
following:
i.
Stimulating
Agricultural
Productivity:
The
current
Agricultural
Development Policy termed the “National Agricultural Technology and
Innovation Policy: 2022-2027” should be aligned, costed and
implemented in collaboration with states.
ii.
Stimulating non-oil exports: Zero Reject Programme, Zero Oil Plan and
other non-oil export drive should be better coordinated and
oversighted.
iii.
Wealth creation drive: an integrated approach to enterprise
development at state and local government levels should be pursued
with clear focus on developing 21st century skills and innovation.
Empowered households and flourishing enterprises guarantee jobs and
sustainable tax revenues.
iv.
Reducing
cost
of
governance
and
improved
transparency:
accumulation of government debts, increase in recurrent expenditure
and leakages should be effectively tamed.
v.
Fiscal-Monetary
policies
coordination:
a
well-coordinated
macroeconomic
governance
framework
that
is
responsive,
transparent, and accountable should be in action before the end of
the year.

10. MUSTAPHA AKINKUNMI
Context
Recent data integration into Nigeria’s historical macroeconomic dataset
reveals a strengthening correlation, estimated at approximately 0.9 between
the Monetary Policy Rate (MPR) and key indicators such as the exchange
rate, inflation, and money supply.
The exchange rate shows a correlation coefficient of 0.92, highlighting the
MPR’s critical role in influencing currency valuation. This strong relationship
underscores the centrality of monetary policy in guiding Nigeria’s
macroeconomic stability and overall economic performance.
Domestic Economic Developments
As of April 2025, Nigeria’s inflation rate eased to 23.71%, reflecting the impact
of sustained interventions by the Central Bank of Nigeria (CBN). Throughout
2024, the CBN implemented comprehensive monetary and foreign exchange
reforms aimed at restoring macroeconomic stability. These efforts successfully
narrowed the gap between official and parallel exchange rates, bolstering
confidence in the naira. The stronger currency and improved market
alignment have contributed to stabilizing inflation, demonstrating the
effectiveness of the CBN’s coordinated policy approach.
Despite these domestic gains, the International Monetary Fund (IMF) has
revised Nigeria’s 2025 growth forecast downward by 0.2 percentage points
to 3.0%. The adjustment reflects persistent structural challenges and ongoing
global trade uncertainties. Nevertheless, Nigeria is still projected to lead SubSaharan Africa in economic growth, signalling the resilience of its economy
and the positive momentum from ongoing reforms.
These developments highlight the need for continued proactive monetary
policy to bolster investor confidence and ensure a competitive, stable
exchange rate regime. Additionally, improving transparency and deepening
liquidity in the foreign exchange market remain critical to achieving longterm currency stability and macroeconomic resilience.
Externally, Nigeria faces risks, where divisions persist over President Trump’s
trade tariffs, with ongoing implications for global markets. Compounding
these challenges are volatile commodity prices, especially crude oil and
evolving U.S. immigration policies, which threaten Nigeria’s diaspora foreign
exchange inflows.
In the foreign exchange market, despite progress in exchange rate
unification, the naira depreciated by 6.05%, reaching ₦1,598.72/US$ as of
May 16, 2025. Similar depreciations were observed in South Africa and Egypt,

reflecting broader regional currency pressures. In the banking sector,
Nigerian banks have shown resilience and growth, with Liquidity Ratio
improving from 50.6% in January to 55.4% in March 2025, and Capital
Adequacy Ratio (CAR) rose to 15.6%, exceeding regulatory thresholds. Net
interest margin increased to 67.0% in April, supported by lower operating
costs, and total bank assets grew by 22.35% (₦30.83 trillion) year-on-year.
Similarly, industry deposits rose 23.58% (₦19.93 trillion), while credit availability
increased 10.89% (₦5.99 trillion). With 19,504 new facilities worth N417.1 billion
issued between March and April.
The increase in CAR from 10.81% in April 2024 to 15.55% in April 2025 is largely
attributed to ongoing bank recapitalization efforts. So far, 19 banks have
raised additional capital, and 7 have met new requirements. However,
Nigeria’s CAR still lags international benchmarks, necessitating further
strengthening to enhance systemic resilience.
Meanwhile, the Non-Performing Loans (NPL) ratio rose to 5.62% in April 2025,
exceeding the 5% prudential threshold, largely due to loan reclassifications
following annual risk assessments. 11 banks were above the NPL limit, up from
6 a year earlier. The CBN may consider temporary forbearance measures for
sectors such as oil and gas, which are exposed to external shocks, to avoid
systemic risk.
A further concern is the financing of critical infrastructure across Africa such
as the U.S. administration’s proposed cut of its $600 million contribution to the
African Development Fund (ADF), which could have serious repercussions. As
the fund’s largest shareholder, Nigeria is particularly vulnerable. A reduction
in ADF resources could impede essential infrastructural development, which is
vital for boosting economic growth, creating jobs for Nigeria’s growing youth
population, raising living standards, and advancing export diversification.
Global Economic Developments
Global economic growth forecasts have been revised downwards, with
projections for 2025 and 2026 reduced by 0.5 and 0.3 percentage points,
respectively. A key outlier is Spain, whose economy continues to outperform
its peers. For emerging market economies (EMEs), growth is now projected at
3.7% in 2025, down from 4.3% in 2024, due to weaker external demand and
tightening global financial conditions.
Among the advanced economies, growth contracted in the first quarter of
2025, most notably in the United States, where persistent trade tensions and
policy uncertainty, largely stemming from President Trump’s trade policies,
have dampened economic activities. In Europe, recovery remains sluggish,
with growth stagnating at 0.2%. This is attributed to high energy costs,
subdued consumer demand, and intensifying trade frictions.

Conversely, the United Kingdom and Japan recorded modest gains, with
growth of 0.5% and 0.4%, respectively, driven mainly by strong private
consumption. On average, advanced economies are expected to expand
by 2.8%, supported by resilient household spending, strength in the services
sector, and continued advances in technology.
Emerging Market and Developing Economies (EMDEs) are projected to grow
at a slower pace in 2025, with aggregate GDP expansion estimated at 3.7%,
down from 4.3% in 2024. Despite this moderation, EMDEs are expected to
continue outpacing the advanced economies, supported by structural
advantages such as favorable demographics, expanding labor markets, and
accelerating urbanization.
However, these economies remain exposed to key vulnerabilities, including
rising external debt, volatile commodity prices, and persistent institutional and
governance challenges, which could constrain their medium-term growth
prospects and increase susceptibility to global shocks.
In contrast, the advanced economies are expected to grow modestly,
averaging 1.5% through 2026, constrained by ongoing trade frictions, aging
populations, and slow productivity growth. The United States is forecast to
grow by 1.8% in 2025, supported by resilient consumer demand, innovation,
and a strong labor market. However, Spain is projected to lead the
advanced economies with 2.5% growth, reflecting regional disparities in
economic performance.
EMDEs are expected to outperform advanced economies by more than 2.5
percentage points, driven by ongoing structural reforms, rising domestic
consumption, and supportive demographics. India remains the fastestgrowing major economy, with growth projected at 6.5% in 2025, underpinned
by investment, reforms, and digital expansion. In Africa, Nigeria is expected
to grow by 3%, significantly above South Africa’s forecast of 1%. However,
Nigeria’s growth remains challenged by high inflation, oil sector volatility, and
security concerns.
Inflation dynamics are expected to diverge. In advanced economies,
inflation is projected to ease to 2.2% by end-2026, down from 2.5% in 2025.
EMDEs will see higher but declining inflation, with forecasts of 5.5% in 2025 and
4.6% in 2026, indicating gradual normalization across regions.
Decision
The CBN’s exchange rate reforms and monetary policy adjustments in 2024
have contributed to greater currency stability, eased inflationary pressures,
and fostered a more predictable business environment. However, these
improvements come with notable risks. Key concerns include the need to

align a stronger naira with underlying economic fundamentals, such as
export competitiveness, fiscal revenue constraints, low oil production, and
the potential for increased non-performing loans. Additionally, the global
outlook remains uncertain, shaped by sluggish but persistent inflation in the
advanced economies, trade tensions, and geopolitical instability. These
developments warrant close and continuous monitoring. Considering this
assessment, I voted to maintain the current Monetary Policy Rate (MPR) and
retain the asymmetric corridor at +500 and -100 basis points around the MPR.

11. PHILIP IKEAZOR

The macroeconomic fundamentals remained stable in response to the tight
stance of the Bank. However, the uncertainty arising from global trade and
geopolitical tensions, could render the domestic economy susceptible to
external shocks. In my view, moderation in monetary policy restraint is
necessary to signal the continued commitment to stable prices and ensure
that the economy operates without excessive pressure from rates hikes.

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 global economy continues its resilience with uneven momentum and
intensified uncertainty, due to rising global debt, escalating trade and
geopolitical tensions, rising bond yields, low investors’ confidence, and
increased fiscal vulnerability.

In response, policy shifts unfold, and countries prioritize agility and shock
absorption, to build resilience amid supply disruptions. As the global economy
adjusts to a new tariff regime for a more inclusive and resilient economy, the
tepid macroeconomic outlook points to a decisive policy action to protect
trade, address debt vulnerabilities, ensure price stability, and tackle climate
change.

Despite this fragmentation, the global economy is expected to remain within
the projected growth rate of 1.5 per cent in 2026, although under the
assumption that growth and inflation moderate at 3.3 and 4.2 per cent in
2025, respectively.

As central banks around the world adjust monetary policy towards
accommodative measures to stimulate growth amidst global uncertainty, the
domestic economy remains robust but faces threats of slow growth of
Nigeria’s exports due to disruptions in the global supply chain. As such, the
attendant decline in revenue and the shrinking fiscal space could pressurize
monetary policy and intensify the inflation-growth trade-off as inflation
expectations remain heightened.

My Considerations
The monetary-fiscal policy mix and the ensuing non-inflationary growth have
moderated inflationary pressure as the fiscal authority addresses key stable
price
enablers
like
security,
agriculture,
and
legacy
infrastructure.
Consequently, real output grew by 3.84 per cent in Q4-2024 from 3.46 per
cent in Q3- 2024 representing an annual growth rate of 3.40 per cent
compared with 2.74 per cent recorded in the same period in 2023.

Headline inflation declined by 2.04 (month-on-month) and 0.56 (year-onyear) percentage points, respectively, between March and April, signaling
the much-expected inflation turning point. Notably, the impact of monetary
policy on the timely turning point of inflation is reflected in the significant
decline in core inflation by 2.4 (month-on-month) and 1.0 percentage points
(year-on-year) in the same period.

The premium between NFEM and BDC also remained below the 5 per cent
threshold between March and April 2025 signaling relative stability in the rates
and efficiency in the FX market, even as the naira depreciated slightly,
largely due to increased FX demand pressure.

Despite these significant improvements, the year-on-year growth dynamics
declined from 0.96 in Q3-2024 to 0.38 percentage point in Q4-2024,
emphasizing relatively slow growth. Imported inflation persists, reflecting
pressure on the exchange rate. Generally, inflationary pressure continues to
ease but it is concerning that inflation is emerging as a rural phenomenon.
Surprisingly, prices of farm produce and food are falling in the urban areas
relative to the rural areas.

At the end of the first quarter, 2025, increase in the growth of monetary
aggregates by 5.07 per cent, excess liquidity injection in the system, foreign
exchange demand pressure, and the shrinking fiscal space of the FGN –-
which are constraint to the smooth and effective transmission of monetary
policy -- would have been a motivation for me to opt for a hike in rates.

My support towards a moderate monetary policy constraint at this time was
meant to continue to signal commitment to price and financial stability.
Second, the adoption of a wait and see stance, despite policy shifts around
the world, in response to the unfolding global macroeconomic environment,
is to avoid pressuring the national government into fiscal surprises, that
undermines the effectiveness of monetary policy. Finally, growth dynamics is
slowing down, requiring support from monetary policy, hence my lean
towards moderation, to support growth and manage the complexities in the
unfolding global trade policies and escalating geopolitical tension.

In conclusion, the persistence of imported inflation and the emerging rural
inflation phenomenon, even as the general price level moderates, requires a
concerted effort by the FGN to complement the demand management
policy of the Bank to redirect consumption pattern.

12. OLAYEMI CARDOSO
Governor of the Central Bank of Nigeria and Chairman, Monetary Policy
Committee
As we convene for the 300th Monetary Policy Committee (MPC) meeting, I
want to thank all the members for their hard work and dedication over what
has been a very challenging period and also use the opportunity to reflect -
with a sense of accomplishment, on what we have been able to collectively
achieve since the first meeting of this group at the 293rd meeting held in
February 2024. It is pleasing to note that our increasing consensus has
stemmed from a deep appreciation of the underlying issues that affect the
economy's trajectory and the courage to take tough decisions we deem
necessary, even against market expectations.
This independence of the MPC and its members, along with the
demonstrated commitment to our mandate of price stability, as seen in our
unwavering resolve to combat inflationary pressures, is a key contributor to
the increased level of confidence and stability we have witnessed in the
economy. The feedback received has been positive and broad-based,
spanning independent-minded observers, multilateral financial institutions,
and rating agencies, and continues to be reaffirmed by improving
macroeconomic indices and data in the public domain.
Despite our tight monetary policy stance, we are seeing improving growth in
the economy which underscores the resilience of the non-oil sector, and
revenue gains from subsidy removal and exchange rate reforms which have
led to improved fiscal conditions. The growth in money supply has been
significantly reduced, and the foreign exchange market is being managed
within a more transparent framework, leading to better price discovery and
reduced volatility in the exchange rate, which in turn is contributing to a
robust growth recorded in the foreign reserves position on the back of
stronger external sector performance. These developments represent
significant
macroeconomic
achievements
and
further
buttress
the
importance of our focus on taming inflation in order to lay a solid foundation
for sustainable economic growth.
The scale of global and domestic shocks over the past 18 months placed our
policy approach in a defensive mode as we sought to find the right
responses to the external headwinds that confronted us on the journey to
return to orthodoxy. The gains we have recorded thus far have now given us
a strong foundation to further build upon, making us better positioned to take
a more forward-looking approach and proactively evaluate various possible

scenarios and policy options available for navigating the uncertain and
dynamic global environment.
On the global scene, trade wars and threats of unprecedented tariffs
dominate the headlines in both the advanced and emerging market
economies. The renewed inflationary pressures resulting from increased tariffs
on trade have already led to a downward revision in the growth outlook,
resulting in a marked decrease in oil prices as energy demand moderates.
This heightened level of macroeconomic uncertainty, increased risk of
protectionism, and asset price volatility now dictate the adoption of a more
cautious approach to policy formulation by monetary authorities across the
world.
On the domestic scene, the latest data indicate a continued moderation of
inflation, and the staff estimate presented suggests further deceleration in the
coming months due to the stability of the exchange rate and lower prices for
food, energy, and transportation. Surveyed expectations from both
businesses and households indicate increased optimism regarding the
economy's trajectory and a positive outlook. The foreign exchange market
also continues to exhibit depth and improved liquidity from more diversified
sources, which has significantly contributed to the resilience shown by the
exchange rate during the recent tariff-induced volatility in global markets.
The stability of the banking system has been strengthened by market reforms
and transparent policy environment, as evidenced by key underlying risk and
profitability metrics and the progress made on the ongoing recapitalisation
exercise. The sustainable growth of our banks, along with their resilience and
ability to withstand external shocks, is closely tied to the sovereign aspiration
to build a well-diversified and robust economy. We expect the banking
system to play a vital role in this phase of economic development for Nigeria.
The macroeconomic outlook, however, is still fraught with elevated risks and
uncertainty. Geopolitical tensions and tariff wars have dampened global
output and created a pathway to inflationary pressures as prices adjust
upward due to higher tariffs on goods. Weaker global demand, driven by
slower growth expectations, has already led to softer commodity prices,
presenting a challenge to Nigeria’s fiscal consolidation efforts due to
reduced export earnings and lower foreign exchange inflows.
The importance of the exchange rate as a price anchor for domestic
economic agents means that the stability of the foreign exchange markets
needs to be guarded to support expectations and investor confidence. We
are also confronted with increased liquidity injections into the banking system

from statutory revenue distributions, highlighting the need for tight monetary
conditions to avoid renewed inflationary pressures.
Weighing the balance of risks, my decision at this meeting, therefore, leans
towards the need for an even more cautious policy stance to monitor global
economic challenges and double down on our efforts to build more buffers,
thereby increasing the economy's resilience to handle shocks and adverse
developments.
In light of these considerations, I am convinced of the need to maintain the
current tight monetary stance and hold the policy rate at current levels. I
remain confident that, through continued reforms, strategic collaboration
with fiscal authorities, and prudent policy implementation, Nigeria’s
economic prospects will continue to strengthen.

Thus, I voted to:
1. Retain the Monetary Policy Rate (MPR) at 27.50%.
2. Maintain the asymmetric corridor around the MPR at +500/-100 basis
points.
3. Retain the Cash Reserve Ratio at 50.00% for Deposit Money Banks and
16.00% for Merchant Banks.
4. Keep the Liquidity Ratio at 30.00%.


OLAYEMI CARDOSO
Governor
May 2025