Nume Ekeghe
The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) concluded its 299th meeting on Thursday, with a decision to retain key monetary parameters.
The meeting, which was closely watched by investors and economic analysts, reaffirmed the CBN’s commitment to maintaining price stability and fostering a more transparent foreign exchange market.
The MPC unanimously voted to hold the Monetary Policy Rate (MPR) at 27.50 percent, maintaining the asymmetric corridor at +500/-100 basis points. Additionally, the Cash Reserve Ratio (CRR) was kept at 50 per cent for deposit money banks and 16 per cent for merchant banks, while the Liquidity Ratio remained at 30 per cent.
CBN Governor Olayemi Cardoso, in his statement, emphasised that the decision was based on available data indicating a moderation in inflationary pressures and improvements in foreign exchange stability.
“As far as the central bank is concerned, we are data-driven, and that will continue. Our decision matrices will be focused accordingly,” Cardoso said.
Market analysts interpreted the decision as a signal that the CBN remains cautious despite recent improvements in key economic indicators.
Inflation and the Rebasing of CPI
A key development discussed at the meeting was the rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), which revised the consumption basket to better reflect current realities.
With this update, headline inflation stood at 24.48 per cent year-on-year in January 2025, down from 34.80 per cent in December 2024 under the previous base year.
The Governor praised the NBS for this improvement, noting, “We will, you know, continuously look at data, and our decision matrices will be focused accordingly. Of course, we have a CPI, which reflects the reality of consumption patterns.
“And that’s a good thing. For example, the previous one that we had took account of black and white television which we all know is no longer relevant. So to that, to that extent, really, one, commends the efforts of the NBS in bringing.”
Exchange Rate Stability and FX Reforms
A major highlight of the MPC meeting was the progress in stabilising the foreign exchange market. The Committee noted the convergence of rates between the official Nigeria Foreign Exchange Market (NFEM) and the Bureau de Change (BDC) segment, attributing the improvement to the recent introduction of the Electronic Foreign Exchange Matching System (B-Match) and the Nigeria Foreign Exchange Code.
Cardoso stated, “We are ensuring a foreign exchange market that is deep, open, transparent, and allows for easy entry and exit. We have seen significant improvements in diaspora remittances, and the differential between the official rate and the BDC rate has narrowed to less than one percent.”
Economic Growth and External Reserves
The MPC reviewed economic growth data, with real GDP expanding by 3.46 percent in Q3 2024, up from 3.19 percent in Q2. The non-oil sector remained the primary driver of growth, although improvements in oil production, which stood at 1.54 million barrels per day in January 2025, were seen as positive for Nigeria’s external balance.
The external reserves were reported at $39.4 billion as of February 14, 2025, providing an import cover of 9.6 months. The Balance of Payments remained strong, with a positive current account balance of $6.06 billion as of Q3 2024.
Collaboration Between Fiscal and Monetary Authorities
The MPC stressed the importance of ongoing coordination between fiscal and monetary policymakers. The Committee lauded the recent Monetary Policy Forum, which brought together key stakeholders, including the Minister of Finance, Minister of Budget and Planning, and representatives from the private sector.
Cardoso reaffirmed the need for continued engagement, stating, “Coordination between fiscal and monetary policy is crucial to sustaining the progress we’ve made. Our recent engagement with fiscal authorities and private sector leaders ensures that our policy actions are aligned to drive economic stability.”
ATM Charges and Consumer Impact
Another key topic that emerged from the discussions was the recent adjustment in ATM withdrawal charges. The CBN reiterated its stance on ensuring fair banking practices and addressing consumer concerns regarding excessive fees.
While some may perceive this measure as adding to economic burdens, it is, in fact, a strategic step to ensure better cash accessibility for Nigerians. This policy emerged from our efforts to address cash shortages, particularly during the peak demand period around the holidays, when many faced undue hardship. and long-term solutions to ensure cash availability.
“Fundamentally, banks need to be incentivised to keep ATMs stocked and accessible, ensuring that customers can withdraw money conveniently. While access has improved, it must become seamless and reliable. This measure encourages banks to invest in expanding ATM networks and maintaining efficient cash distribution.”
“Importantly, customers withdrawing from their own banks will not incur charges, and those who frequently use another bank’s ATM can apply for a card from that institution at no extra cost.
“Ultimately, this policy aims to enhance financial access, increase ATM deployment, and eliminate exploitative cash withdrawal practices, fostering a more efficient and consumer-friendly banking system.”
Outlook and Policy Direction
Looking ahead, the MPC highlighted that while inflationary pressures have moderated, food prices remain a concern. Members expressed optimism that improved security in agricultural regions and other supply-side interventions would help sustain the downward trend in food inflation.
The CBN reiterated its commitment to maintaining orthodox monetary policies, with Cardoso stating, “We will stay the course. Inflation has been too high for too long, and our objective is to bring it down from double digits to single digits over the medium to long term.”
