CBN Retains Interest Rates at 27.5%, Nigerian Banks Release Savings Rates

• The Central Bank of Nigeria has decided to retain the Monetary Policy Rate (MPR), the benchmark interest rate
• This decision to retain the interest rate follows NBS releasing a rebased consumer price index (CPI)
• The CBN's decision implies that Nigerian banks will retain the interest rates on lending and savings to customers

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Central Bank of Nigeria's Monetary Policy Committee (MPC) retained its benchmark interest rate, known as the Policy Rate (MPR), at 27.5%.

The decision was announced on Thursday, February 20, after a two-day meeting.

CBN's decision to hold the rate comes on the back of the National Bureau of Statistics releasing a rebased consumer price index (CPI).

The rebase of the CPI led to a sharp reduction in Nigeria’s headline inflation rate to 24.5% year-on-year in January 2025 (post-rebasing), compared with the pre-rebasing reading of 34.8% year-on-year in December 2024.

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Rebasing is a statistical process that updates the base year used to calculate a country's economic output.

For GDP calculations, the NBS plans to use 2019 as the new base year instead of 2010, which has been in use for the past 15 years, Daily Trust reports.

CBN MPC members retain a 27.5 rate

Due to the ongoing changes from the rebasing, the MPC unanimously agreed to keep the rate unchanged after its meeting.

Yemi Cardoso, the governor of the CBN, who announced the decision, said the following was agreed:

• Retain the MPR at 27.50%.
• Retain the asymmetric corridor around the MPR at +500/-100 basis points.
• Retain the Cash Reserve Ratio of Deposit Money Banks at 50.00% and Merchant Banks at 16.00%.
• Retain the Liquidity Ratio at 30.00%.

CBN also explained in its communique released after the meeting that the decision to retain all monetary parameters was due to satisfaction with recent macroeconomic developments, which are expected to positively impact price dynamics in the near to medium term.

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Part of the communique reads:

"These include stability in the foreign exchange market, resulting in the appreciation of the exchange rate, and the gradual moderation in the price of Premium Motor Spirit (PMS).

"However, members were not oblivious to the risk of persistent inflationary pressures, largely driven by food prices."

The committee noted the recent rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), which adjusted the weights of items in the consumption basket to reflect current consumption patterns.

The committee further observed that as the federal government continues to improve security in food-producing communities, along with other measures to enhance food supply, food prices are expected to continue moderating.

It added:

"Members reiterated the benefits of increased collaboration between monetary and fiscal authorities, as demonstrated at the recently concluded Monetary Policy Forum organized by the Bank.

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"The MPC thus urged the continued strengthening of this collaboration to achieve the mutually beneficial objectives of price stability and sustainable growth."

26 Nigerian banks' savings rates

Legit.ng reported that the CBN has released the latest savings interest rates for Nigerian banks.

The data, published on the CBN website, is part of the apex bank's commitment to transparency to guide bank customers.

Banks now offer their customers at least 7.88% interest on their deposits.

Proofreading by Nkem Ikeke, journalist and copy editor at Legit.ng.

Source: Legit.ng