Why We Held Interest Rates at 27% Despite Inflation Relief – Cardoso

The Central Bank of Nigeria (CBN) on Tuesday retained the Monetary Policy Rate at 27 per cent, saying the current economic conditions do not justify a rate cut despite seven consecutive months of disinflation.

CBN Governor, Olayemi Cardoso, announced the decision at the end of the 303rd Meeting of the Monetary Policy Committee (MPC) held on November 24–25 in Abuja.

According to Cardoso, the Committee voted overwhelmingly to maintain its tight stance, while adjusting the monetary policy corridor to +50/-450 basis points, a move designed to strengthen the transmission of earlier rate hikes and further tame inflation.

“The Committee decided by majority to retain the current monetary policy stance,” Cardoso said.

“Headline inflation has decelerated for the 7th consecutive month, but remains high at double digits, requiring sustained tight conditions until the downward trend becomes firmly anchored.”

The MPC also welcomed the continued moderation in inflation, which fell to 16.05% in October, from 18.02% in September. Food inflation also slowed sharply to 13.12%, driven by improved food supply, a stable naira, and favourable harvest conditions.

But members warned that inflation — still in double digits remains a key risk.

“Maintaining the policy stance allows previous hikes to fully transmit, especially amid global uncertainties,” the MPC said.

Similarly, the apex governor also welcomed Nigeria’s external sector which continued to improve, supported by a surplus current account balance and steady inflows that helped stabilise the exchange rate.

The Committee also expressed satisfaction with: Sustained GDP growth (Q2 2025 at 4.23%); strong PMI reading of 56.4, the highest in five years; Increased investor confidence following rating upgrades and removal from the FATF grey list.

The MPC will convene again on February 23–24, 2026.