Facebook Instagram Twitter Youtube
  • Home
  • News
    • National News
    • State News
  • Business
  • Features
    • Insight
    • Opinion
  • FAAC
  • Financial
    • Facts & Figures
    • Monetary
    • Tax Matters
  • Sidelines
  • Profile
  • Special Focus
Search
Monday, May 26, 2025
  • Home
  • About
  • Adverts
  • Contact
Facebook Instagram Twitter Youtube
Economic Confidential
  • Home
  • News
    • AllNational NewsState News
      editSecurities And Exchange Commission

      SEC Reports N1.1trn Dividends for Listed Companies in 2024

      edit

      Nigeria’s FDI Plummets Below 1% of GDP, World Bank Says

      edit

      Why NNPC Shutdown Port Harcourt Refinery

      edit

      AfCFTA: FG Unveils Intra-African Air Cargo Corridor

  • Business
    • editSecurities And Exchange Commission

      SEC Reports N1.1trn Dividends for Listed Companies in 2024

      edit

      Nigeria’s FDI Plummets Below 1% of GDP, World Bank Says

      edit

      AfCFTA: FG Unveils Intra-African Air Cargo Corridor

      editcbn

      CBN Reports $267.96m Foreign Trade Payment

      editJennifer Adighije

      NDPHC Has Made Significant Strides Towards Energy Inclusion, Says Engr. Jennifer…

  • Features
    • AllInsightOpinion
      editCBN Governor, Olayemi Cardoso

      Steady Hands in Stormy Times: Why Holding Rates Was the Right…

      editPresident Bola Ahmed Tinubu

      Tinubu’s “Nigeria First” Policy and the Case for Economic Independence, by…

      editNigerian Customs Service, NCS

      Nigeria Customs and the Clampdown on Airport Cash Smuggling, by Tahir…

      editNigerian Customs Service, NCS

      OPINION: Nigeria Customs and the Currency Declaration Form – A Strategic…

  • FAAC
    • editFAAC

      FAAC: FG, States, LGs Share N1.7tn in February

      editFederal Account Allocation Committee FAAC

      FAAC: FG, States, LGs Shared N1.7trn in January

      editFAAC

      N13.7trn Federation Account Revenue Unremitted by NNPCL – FAAC

      editFAAC

      FAAC Revenue Declines by N303bn in December

      editcbn

      Federation Account grew by 7.48% in Q3 2024

  • Financial
    • AllFacts & FiguresMonetaryTax Matters
      edit

      Nigeria Spends $1bn to Upgrade Telecom Infrastructure

      editTreasury Bills

      CBN Recieves N1.17trn in Bids for Treasury Bills Auction

      editForeign Portfolio Investments

      NGX Sees 91% Drop in Foreign Transactions to N63bn

      editBonds

      FG Seeks N300bn Through Bond Auction

  • Sidelines
    • editSaliu Mustapha

      Visit Kwara: Saliu Mustapha Pens Foreward For New Book Spotlighting Kwara…

      edit

      Apple Data Breach: Marketing Strategy or Security Issue

      edit

      Dangote-BUA Sugar Scarcity Feud

      edit

      Google: Expanding 2-Step Verification Enrollment

      edit

      SAEMA Awards 2021: Submit Nominees for Security and Emergency Management Awards

  • Profile
    • editSambo Dasuki

      Polo, Politics, and the Dasuki Family

      editThe immediate-past Director in charge of Executive Secretary’s Office at the National Sugar Development Council (NSDC), Mallam Ahmed M. Waziri.

      Ahmed Musdafa Waziri: A Quintessential Civil Servant at 60, by Abdulrahman…

      edit

      PROFILE: Ten Things to Know About New CCB Chairman, Dr Abdullahi…

      editCBN's Acting Director of Corporate Communications, Hakama Sidi Ali

      Hakama Sidi-Ali: The CBN’s First Female Spokesperson and Reputation Management

      editAisha Rimi

      PROFILE: Aisha Rimi, a Square Peg in NIPC’s Square Hole

  • Special Focus
    • editPoint of Sale Transaction (PoS)

      SPECIAL REPORT: Cash Crunch, Exorbitant POS Charges in the Face of…

      edit

      SPECIAL REPORT: Sickle Cell Awareness- A Public Health Imperative for Nigeria,…

      editGovernor Abba Yusuf of Kano, President Tinubu of Nigeria and Governor Sim Fubara of Rivers

      Shambolic Local Elections: Are Governors Setting ‘Standard’ for Tinubu’s 2027 Re-Election…

      editObamodi Oluwadamilola Faith

      Palliatives Distribution: A Culture FG Must Stop By Obamodi Oluwadamilola Faith

      edithealth care sector

      EXCLUSIVE: How Health Ministry Scuttled Plot to Frustrate Multi-billion Naira Malaria…

Home Features Opinion Steady Hands in Stormy Times: Why Holding Rates Was the Right Call...
  • Features
  • Opinion

Steady Hands in Stormy Times: Why Holding Rates Was the Right Call for Nigeria, by Rahma Olamide Oladosu

By
rahma Olamide Oladosu
-
May 26, 2025
CBN Governor, Olayemi Cardoso
CBN Governor, Olayemi Cardoso

Steady Hands in Stormy Times: Why Holding Rates Was the Right Call for Nigeria, by Rahma Olamide Oladosu

Your browser does not support the video tag.

 

In the face of persistent global economic uncertainties and domestic challenges, the decision of the Central Bank of Nigeria’s Monetary Policy Committee (MPC) to retain the Monetary Policy Rate (MPR) at 27.50 per cent is a deliberate and strategic move aimed at maintaining stability and buying time for ongoing reforms to yield results. While such decisions often spark debate within economic circles, a closer examination reveals prudence and foresight rooted in Nigeria’s evolving macroeconomic context.

The MPC’s 300th meeting, held on the 19th and 20th of May 2025, comes at a critical juncture for Nigeria’s economy. After a long period marked by inflationary surges, exchange rate instability, and structural inefficiencies, the country is now beginning to register modest but meaningful improvements across key indicators. The Committee’s unanimous vote to hold rather than hike or lower rates is therefore an acknowledgment of early gains and a cautious step toward sustainable recovery.

A few data points tell the story. Inflation is finally showing signs of retreat. The year-on-year headline inflation dropped from 24.23 per cent in March to 23.71 per cent in April 2025. Food inflation, which has been a major source of hardship for Nigerian households, also eased to 21.26 per cent, while core inflation declined to 23.39 per cent. These reductions, though marginal, are significant given the deep inflationary pressures of the past few years.

The progress in food inflation in particular deserves recognition. The Federal Government’s efforts to increase food supply and boost agricultural production are clearly having a positive effect. Insecurity in farming regions has long hampered food output, making even local staples unaffordable for the average Nigerian. The recent improvements suggest that security interventions and agricultural support policies are beginning to bear fruit. Yet, the MPC wisely warns against complacency, urging continued support to farmers and stronger security measures to ensure sustained progress.

Another encouraging sign is the relative stability in the foreign exchange market. The narrowing of the gap between the Nigeria Foreign Exchange Market (NFEM) and the Bureau De Change (BDC) windows reflects increasing confidence in the system. After years of sharp disparities that invited arbitrage and speculative attacks on the naira, this convergence is a welcome development. It suggests that CBN’s reform of the FX framework is beginning to deliver tangible outcomes.

With Olayemi Cardoso in charge, the Central Bank has made decisive moves to rebuild confidence in the monetary system. While the challenges are immense, his calm but firm approach to policy has begun to inspire a shift in tone among investors and economic watchers. It is particularly under Cardoso’s watch that the CBN has stayed committed to exchange rate reform, banking sector oversight, and inflation targeting without resorting to panic measures.

The improvement in the country’s external reserves, which grew to 38.90 billion US dollars in mid-May from 37.82 billion US dollars at the end of March, is another step in the right direction. This rise in reserves offers a 7.6-month import cover, a buffer that is vital as Nigeria navigates an unpredictable global trade environment and fluctuating oil revenues.

Read Also:

  • Mining Reforms Attract $800m Foreign Investment – Alake
  • SEC Reports N1.1trn Dividends for Listed Companies in 2024
  • Nigeria’s FDI Plummets Below 1% of GDP, World Bank Says

However, it is not all smooth sailing. The MPC acknowledged lingering inflationary pressures driven by factors like high electricity prices, forex demand challenges, and structural deficiencies. It also highlighted concerns about the recent dip in crude oil prices, a direct threat to government revenues and budget implementation. These warning signs underscore why a hold decision was necessary. Loosening policy now could undo the fragile gains made, while tightening further might choke growth at a time when real GDP is still recovering, having posted a decent 3.84 per cent growth in the fourth quarter of 2024.

Retaining the MPR at 27.50 per cent, along with the Cash Reserve Ratio (CRR) of 50.00 per cent for Deposit Money Banks and 16 per cent for Merchant Banks, keeps monetary conditions tight enough to discourage inflation without triggering undue credit constraints. The liquidity ratio remains at 30 per cent, providing banks with room to operate while ensuring systemic stability. In short, the CBN is walking a tightrope, balancing inflation control with the need to preserve growth momentum.

This careful navigation reflects the kind of balanced leadership Governor Cardoso has brought to the CBN. Rather than opting for dramatic swings in policy that could destabilise markets, the MPC under his guidance has shown a commitment to gradualism and evidence-based decision-making.

Investors, both domestic and foreign, crave predictability. Sudden rate hikes or cuts in uncertain times can destabilise market expectations. By maintaining current policy settings, the MPC allows existing measures time to crystallise and sends a message of confidence in its strategy.

One must also appreciate the Committee’s emphasis on inter-agency coordination. The call for the fiscal authorities to ramp up foreign exchange earnings from oil, gas, and non-oil exports is crucial. Monetary policy alone cannot fix Nigeria’s economic challenges. Structural reforms, fiscal discipline, and export diversification must go hand in hand with monetary tightening. The synergy between the Central Bank and other arms of government will determine the long-term success of economic stabilisation efforts.

The MPC’s endorsement of the ongoing recapitalisation in the banking sector is also significant. A stronger well-capitalised banking system is indispensable for credit expansion, financial inclusion, and economic resilience. By pledging to maintain oversight and enforce compliance with macroprudential regulations, the CBN is taking proactive steps to avert systemic risks and maintain confidence in the financial system.

In the broader global context, Nigeria is not alone in facing headwinds. The International Monetary Fund (IMF) has revised its global growth forecast downward to 2.8 per cent for 2025, citing persistent policy uncertainties. Central banks worldwide are grappling with the trade-offs between inflation control and economic stimulus. The MPC’s resolve to monitor both domestic and international developments closely ensures Nigeria remains adaptive and responsive to emerging shocks.

This 300th meeting of the MPC marks more than just a symbolic milestone. It represents a shift in Nigeria’s monetary policy posture toward one that is strategic, data-driven, and consistent. From a reactionary stance dictated by crisis, we are now seeing the emergence of a more steady hand on the wheel, guided by an understanding of the value of timing, patience, and long-term focus.

There will undoubtedly be critics who argue that with inflation still hovering above 20 per cent, a more aggressive stance is needed. But policymaking is not just about numbers. It is about context, trajectory, and sustainability. The gradual disinflation trend, stronger reserves, and narrowing FX gaps all point to early success under the current framework.

As Nigerians continue to endure economic pressure, the expectation for swift results is understandable. But true economic reform takes time. What the CBN under Governor Cardoso has demonstrated is that consistency, transparency, and institutional focus can gradually turn the tide. In a time of deep uncertainty, holding the line can sometimes be the most courageous decision of all.

Oladosu is a Staff Writer with the Economic Confidential

spokesperson
PRNigeria.com
EconomicConfidential.com
PRNigeria.com/Hausa
EmergencyDigest.com
PoliticsDigest.ng
TechDigest.ng
HealthDigest.ng
SpokesPersonsdigest.com
TeensDigest.ng
ArewaAgenda.com
Hausa.ArewaAgenda.com
YAShuaib.com
  • TAGS
  • cbn
  • MPC
  • MPR
  • Rahma Olamide Oladosu
  • Yemi Cardoso
Previous articlePROFILE: Ken Nnamani – New Chairman, NIPSS Kuru
<a Href="https://economicconfidential.com/byline/rahma-olamide-oladosu/" Rel="tag">rahma Olamide Oladosu</a>
rahma Olamide Oladosu

RELATED ARTICLESMORE FROM AUTHOR

editPresident Bola Ahmed Tinubu
Opinion

Tinubu’s “Nigeria First” Policy and the Case for Economic Independence, by Umar Farouk Bala

editNigerian Customs Service, NCS
Opinion

Nigeria Customs and the Clampdown on Airport Cash Smuggling, by Tahir Ahmad

editNigerian Customs Service, NCS
Opinion

OPINION: Nigeria Customs and the Currency Declaration Form – A Strategic Move Against Illicit Finance Flows, by Tahir Ahmad

edit
Featured Post

Who’s Stealing Nigeria’s Subsidy Savings? by Umar Farouk Bala

editCentral Bank of Nigeria, CBN
Opinion

CBN’s NRBVN and the Road to $1bn, by Rahma Olamide Oladosu

editYouths Digest Workshop
Opinion

Bridging the Gap: Youths Digest Equips Nigeria Customs with 21st-Century Communication Skills, by Tahir Ahmad

Recent Posts

  • Steady Hands in Stormy Times: Why Holding Rates Was the Right Call for Nigeria, by Rahma Olamide Oladosu
  • PROFILE: Ken Nnamani – New Chairman, NIPSS Kuru
  • Mining Reforms Attract $800m Foreign Investment – Alake
  • SEC Reports N1.1trn Dividends for Listed Companies in 2024
  • Nigeria’s FDI Plummets Below 1% of GDP, World Bank Says

EDITOR PICKS

editKen Nnamani

PROFILE: Ken Nnamani – New Chairman, NIPSS Kuru

Editors Pick May 26, 2025
editDele Alake, Minister of Solid Minerals Development

Mining Reforms Attract $800m Foreign Investment – Alake

Featured Post May 26, 2025
editSecurities And Exchange Commission

SEC Reports N1.1trn Dividends for Listed Companies in 2024

Business May 26, 2025

POPULAR POSTS

editNigerian Maritime

FG Loses $1bn Annually In Maritime Sector

Monetary May 19, 2020
edit

Ajaokuta Steel Company Gets N4.3bn for Revival

Business January 9, 2017
editMTN Office

MTN Nigeria Opens Offer Of N100bn Commercial Paper Issuance

Business May 29, 2020

POPULAR CATEGORY

  • Business13235
  • Monetary3024
  • News2896
  • Featured Post2761
  • Financial2715
  • Editors Pick2174
  • National News1955
  • Opinion1692
  • Features861
ABOUT US
Economic Confidential is the Abuja based Nigerian News Magazine. Economic Confidential Magazine is Factual, Authoritative and Accessible.
Contact us: [email protected]
FOLLOW US
Facebook Instagram Twitter Youtube
© 2017 Economic Confidential . All Rights Reserved.
Latest News
Mining Reforms Attract $800m Foreign Investment – AlakeSEC Reports N1.1trn Dividends for Listed Companies in 2024Nigeria's FDI Plummets Below 1% of GDP, World Bank SaysWhy NNPC Shutdown Port Harcourt RefineryAfCFTA: FG Unveils Intra-African Air Cargo CorridorCBN Reports $267.96m Foreign Trade PaymentNDPHC Has Made Significant Strides Towards Energy Inclusion, Says Engr. Jennifer AdighijeSave Our Rice Industry: Stakeholders Call for FG InterventionPresident Tinubu's Reforms Push Customs Revenue to  ₦1.3 trillion in Q1 2025 - CG Adeniyi Customs Eyes $250bn in Modernisation Project, Trains 1,800 Officers on AINSDC Act Amendment to Save Nigeria $1bn Annually - BakrinKaduna Electric Signs Strategic MoU for 100MW Solar Energy ProjectConscience Foundation Opposes Move to Merge National AwardsTinubu's "Nigeria First" Policy and the Case for Economic Independence, by Umar Farouk BalaNigeria Customs and the Clampdown on Airport Cash Smuggling, by Tahir Ahmad
X whatsapp
Javascript ES6 not supported
This feature is not available on this browser. Please use a browser that supports javascript ES6:
Chrome (v49+)
Firefox (v57+)
Safari (v11+)
IE Edge (v16+)
Edit with Live CSS
Save
Write CSS OR LESS and hit save. CTRL + SPACE for auto-complete.