When the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) concluded its 303rd sitting in Abuja on 25 November 2025, it delivered a decision that combined caution with subtle technical recalibration. The headline message was straightforward: the Monetary Policy Rate (MPR) remained unchanged at 27 per cent. Around this anchor, however, the Committee adjusted the mechanics of monetary policy by narrowing and tilting the corridor that governs short-term liquidity management.
These choices, to hold the policy rate while refining the operational corridor and maintaining already tight reserve and liquidity requirements, reveal the Committee’s reading of a shifting risk landscape: disinflation that must be protected, exchange-rate fragility that must be contained, and a financial system that must transmit policy without destabilisation.
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The MPC’s decision to retain the MPR at 27 per cent was accompanied by a suite of unchanged and recalibrated parameters. The Cash Reserve Ratio (CRR) for deposit money banks was kept at 45 per cent, merchant banks’ CRR remained at 16 per cent, and the Liquidity Ratio held steady at 30 per cent. The Committee also retained the 75 per cent CRR imposed on non-TSA public sector deposits, a measure that tightens liquidity and limits inflationary spillovers from large government deposits.
The significant technical adjustment was the alteration of the standing facilities corridor to +50 / -450 basis points around the MPR. This replaced the previously wider, more symmetrical corridor. The narrowed upper band increases the cost of borrowing from the central bank, while the broader lower band allows banks more room on the deposit side. This subtle shift discourages reliance on central bank lending and widens the space for market liquidity to adjust without forcing a change in the headline rate.
Disinflation in Motion but Still Fragile
The November decision reflects a domestic environment in which inflation has begun to ease after years of intense pressure. Headline inflation fell markedly through 2025, offering the MPC some breathing space after the sharp price surges of 2023 and 2024.
Even so, the Committee stressed that the hard-won gains remain fragile. Exchange-rate pass-through continues to pose a significant risk to consumer prices, and energy costs, especially from logistical and imported inputs, still influence production across key sectors. The MPC’s cautious stance shows its determination to ensure that inflation expectations fully align with the path of disinflation.
Nigeria’s policy choices sit within a global context in which central banks have become increasingly defensive. While inflation in many advanced and emerging economies has eased from the highs of 2022–2024, risks from volatile energy markets, geopolitical tensions, and supply-chain disruptions remain elevated.
International institutions expect global growth to hover slightly above 3 per cent in 2025, a rate too modest to erase underlying vulnerabilities. For Nigeria, a country heavily exposed to imported inflation through fuel, food, and industrial materials, these global pressures shape the MPC’s focus on maintaining stability rather than pivoting toward growth-stimulating easing.
How Previous Decisions Shape Today’s Restraint
To understand the November 2025 posture, it is helpful to revisit the MPC’s documented positions from late 2024. At that time, inflation was considerably higher, prompting a much tighter monetary stance, a higher MPR, and less accommodative corridor configurations.
Those earlier decisions set the foundation for the cautious recalibration underway today. The November 2024 communique, which followed a significant surge in inflation, explained the need for aggressive tightening at that time. In contrast, the November 2025 decision reflects the Committee’s judgement that inflation is gradually cooling, yet not enough to justify broad policy relaxation.
Transmission and the Banking System: Costs and Anchors
Retaining a high CRR and a fixed Liquidity Ratio reinforces a tight monetary environment that constrains rapid credit expansion. Borrowers continue to face elevated lending rates, while banks must operate within strict liquidity parameters.
Still, these settings protect financial system stability. Capital adequacy remains strong, non-performing loans are contained, and liquidity indicators sit comfortably above regulatory thresholds. The adjusted corridor further shapes market behaviour: borrowing from the CBN becomes costlier, while banks gain additional flexibility in the deposit window. This arrangement sterilises short-term fiscal or foreign-exchange shocks and strengthens the central bank’s influence over short-term market rates.
Exchange-Rate Management: Stabilisation Without Complacency
Exchange-rate stability remains central to the MPC’s concerns. While Nigeria’s reserves have benefited from improved external flows, including remittances and capital inflows, the market still experiences episodes of elevated demand pressure.
The November decision can therefore be read partly as an exchange-rate strategy. Maintaining tight liquidity through high reserve requirements, while adjusting corridor mechanics, allows the Bank to respond more effectively to FX pressures without changing the headline policy rate, a move that could potentially unsettle the disinflation trajectory or roil the banking market.
What It Means for Investors, Firms and Households
For investors, the November meeting delivered predictability. A stable MPR sends a message of continuity, while the corridor adjustment hints at the Bank’s readiness to respond tactically to market fluctuations.
For corporates and SMEs, the tight credit environment persists. Borrowing costs remain high, and liquidity constraints mean banks will continue to prioritise low-risk lending. Households, meanwhile, benefit from easing inflation, but rising living costs and high credit prices limit the pace at which real incomes can recover.
In broader economic commentary, analysts have described this stage of monetary policy as a “holding pattern” a period of watching, measuring and guarding against reversal.
The Road Ahead: Data Will Decide
The MPC has made clear that future decisions will be driven by incoming data. Monthly inflation figures, exchange-rate behaviour, fiscal deposit patterns and global commodity prices will shape the Committee’s views ahead of subsequent meetings.
Operational cues will also matter. How the CBN manages the revised corridor through open market operations, how liquidity flows respond to government inflows and outflows, and how banks adjust their balance sheets will determine whether policy remains tight or gradually shifts toward neutrality.
A Cautious Steadying of the Ship
The November 2025 MPC meeting reflected a blend of steadiness and technical fine-tuning. Leaving the MPR unchanged at 27 per cent signalled confidence in the direction of domestic disinflation, while the corridor adjustment demonstrated the Bank’s readiness to navigate short-term pressures with precision rather than blunt-force policy moves.
If inflation continues to ease and external buffers strengthen, the CBN may gain room for a measured policy loosening in the medium term. For now, however, the Committee remains focused on stabilising prices, preserving market confidence and ensuring that Nigeria’s financial system stays resilient through uncertain global and domestic conditions.
