How MPC members agreed to retain existing rates

Members of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) have shared their thoughts on the state of the economy, pointing to a steady seven-month drop in the cost of living.

In their recent personal reports, the experts discussed how they plan to move from strictly raising interest rates to a more careful approach that supports local businesses while keeping the Naira stable.

The main focus of the meeting was the fact that inflation—the rate at which prices rise—fell to 16.05 percent in October 2025. One member, Aku Pauline Odinkemelu, noted that this downward trend is now “entrenched and broad-based.”

She suggested that because things are improving, it is safe to slightly reduce the main interest rate. This, she argued, would give a “measured stimulus” to help farmers and factory owners grow their businesses without causing prices to jump back up.

However, not everyone agreed that it was time to relax. CBN Governor Olayemi Cardoso and Deputy Governor Emem Usoro voted to keep interest rates exactly where they are at 27 percent. They pointed out that there are still “heightened risks” on the horizon.

Governor Cardoso explained that as Nigeria moves toward the 2026 budget and the 2027 elections, the government often spends more money, which can lead to higher prices. He said keeping the rate high is a “clear signal of reinforcing stability” to make sure the progress made so far is not lost.

One big change all members agreed on was a new rule for how banks keep their money with the CBN. They adjusted a specific “corridor” to make it less attractive for banks to just leave their cash sitting idle at the Central Bank.

Instead, the goal is to push banks to lend that money to everyday Nigerians and businesses. Murtala Sabo Sagagi stated that this move helps “tighten liquidity” while encouraging banks to manage their cash more effectively.

The reports also showed good news for Nigeria’s savings. Deputy Governor Bala Mohammed Bello reported that the country’s foreign reserves grew to $46.70 billion in November 2025. He added that Nigeria’s removal from a global “grey list” for financial monitoring has “further enhanced Nigeria’s competitiveness globally,” making the country more attractive to international investors.

Even with these wins, some members warned that the job is not yet finished. Aloysius Uche Ordu cautioned that fixing the economy is a “marathon, not a sprint.” He reminded everyone that other countries that celebrated victory over high prices too early often saw the problems come back even worse.

Finally, the committee members asked the government to help out with things the CBN cannot control, such as improving security for farmers and lowering the high cost of electricity and transport.

Philip Ikeazor noted that while the exchange rate is steady, prices in the cities are still a concern. He called for the government to fix these “structural impediments” to help the economy grow for everyone.

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