The Central Bank of Nigeria (CBN) has taken significant steps to stabilize the naira and control inflation. At its 299th Monetary Policy Committee (MPC) meeting on February 19 to 20, 2025, the committee decided to maintain the Monetary Policy Rate (MPR) at 27.5%, signaling a pause after six consecutive hikes in 2024.
CBN Governor Olayemi Cardoso announced the decision, emphasizing the need to balance inflation control with exchange rate stability. The committee also retained the Cash Reserve Ratio at 50% for commercial banks and 16% for merchant banks, while the liquidity ratio remained at 30%.
The naira has shown signs of recovery, appreciating by 6.95% in the parallel market to N1,510/$ as of February 20, 2025. The gap between official and black market rates has also narrowed, boosting confidence in the foreign exchange market. This improvement is attributed to increased liquidity and transparency measures, including the introduction of the Electronic Foreign Exchange Matching System and the Nigerian FX Code.
Inflation remains a key concern, with the annual rate at 24.48% in January 2025. However, the CBN aims to bring it down to single digits in the medium term. Cardoso reaffirmed the bank’s commitment to orthodox monetary policies to achieve this goal.
In addition to monetary policy measures, the CBN is preparing for major banking sector reforms, including new capital requirements for banks set to take effect in March 2026. These measures aim to ensure financial sector resilience and support economic growth.
With a firm focus on stabilizing the naira, curbing inflation and strengthening the banking system, the CBN’s latest policies reflect a strategic approach to addressing Nigeria’s macroeconomic challenges.