CBN’s Steady Policy Stance Deepens Economic Stability

By Salmanu Isah Darazo

The Central Bank of Nigeria (CBN) has reaffirmed its commitment to price stability and economic recovery, retaining the Monetary Policy Rate (MPR) at 27 per cent during the 303rd meeting of the Monetary Policy Committee (MPC) held on November 24–25, 2025. Other key parameters were maintained, including the Cash Reserve Ratio and Liquidity Ratio, while the Standing Facilities corridor was adjusted to +50/-450 basis points to strengthen monetary transmission.

This decision reflects the Bank’s confidence in its earlier reforms, which continue to yield measurable progress. Nigeria has now recorded its seventh straight month of disinflation, with headline inflation slowing to 16.05 per cent in October from 18.02 per cent in September. Food inflation also dropped sharply to 13.12 per cent, signalling improved food supply, relative exchange rate stability and sustained moderation in imported inflation.

Monetary Reforms Deliver Clear Gains

The MPC emphasised that recent gains in price and financial stability are the direct outcome of deliberate, data-driven policy actions. The foreign exchange market has recorded improved stability, supported by increased capital inflows and a surplus current account balance. These developments have strengthened the naira and eased pressure on domestic prices.

Nigeria’s external reserves have risen to US$46.70 billion, enough to finance more than 10 months of imports, marking one of the strongest reserve positions in several years. This buffer provides the economy with greater resilience against external shocks and enhances investor confidence.

Further boosting market sentiment were Nigeria’s upgrade in sovereign credit ratings and the country’s removal from the FATF grey list, milestones which reflect improved transparency, regulatory compliance and closer coordination between fiscal and monetary authorities.

Banking Sector Strengthened by Recapitalisation Drive

The Nigerian banking system remains stable and resilient, with most financial soundness indicators well within regulatory thresholds. The CBN’s ongoing recapitalisation programme aimed at strengthening the long-term health of the financial sector, has recorded impressive progress, with 16 banks fully complying with the revised capital requirements.

This achievement not only enhances the sector’s capacity to withstand shocks but also ensures that banks are better positioned to support sustainable economic growth. Business confidence has equally strengthened, as shown by the Purchasing Managers’ Index (PMI), which rose to 56.4 points, the highest in five years, indicating expanding economic activity and improved private-sector optimism.

Positive Global and Domestic Outlook

With global inflation expected to ease through 2026 due to improved supply chain conditions and softer commodity prices, Nigeria is well positioned to consolidate its disinflation trajectory. The MPC projects that domestic inflation will continue to moderate in the near term, supported by the harvest season, stable foreign exchange conditions and the lingering impact of earlier monetary tightening.

Governor Olayemi Cardoso reiterated the Bank’s commitment to evidence-based monetary policy, emphasising that stability, transparency and continuity remain central to the CBN’s mission of safeguarding the Nigerian economy. The Bank’s performance over the past months reflects a renewed credibility that is strengthening investor confidence and anchoring expectations across markets.

Salmanu Isah Darazo, a columnist, publisher and policy analyst can be reached via Salmanudrz@gmail.com