THE Central Bank of Nigeria (CBN) has surprised markets, retaining the Monetary Policy Rate, which is the benchmark interest rate, at 27 percent.

The decision was announced at the end of the Monetary Policy Committee (MPC) meeting on Tuesday in Abuja, where members voted to keep key parameters unchanged.

Hence, the CBN maintained the cash reserve ratio (CRR) at 45 percent for deposit money banks and 16 percent for merchant banks, while leaving the liquidity ratio unchanged at 30 percent.

The MPR has remained elevated despite the sustained decline of headline inflation in Africa’s most populous nation. Nigeria’s headline inflation rate stood at 16.05 percent in October 2025 as against 33.88 percent in the corresponding period of 2024, according to the National Bureau of Statistics (NBS).

Month-on-month, annual inflation decelerated to 16.1 percent in October from 18.02 percent in the previous month, contrary to market expectations. Economists and market experts had projected a bumper rate cut today in the face of an agreessively declining inflation rate.

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Frontier markets economist, Mr Charles Robertson, had projected a 250-basis-point rate reduction, noting that the lowering inflation rate justfied the cut.

Managing Director and Chief Economist for Africa and the Middle East at Standard Chartered Bank, Ms Razia Khan, had predicted a 50-basis-point rate cut as inflation trended downwards. “We see a 50bps cut at next week’s meeting to 26 percent,” she had said.

Emerging markets analyst, Mr Ike Ibeabuchi, had projected a 100-basis-point reduction, noting that the rate cut had become inevitable in the face of the declining inflation. However, today’s decision shows that members of the Monetary Policy Committee (MPC) of the CBN aren’t yet convinced that the current declining inflation is sustainable.

CBN Governor, Mr Yemi Cardoso, said the decisions reflected the MPC’s focus on achieving low and stable inflation. The committee, he said, welcomed the continued deceleration in headline inflation, driven by sustained monetary tightening, stable exchange rate, and petrol price stability.

He cited the committee’s acknowledgment of progress in bank recapitalisation, confirming that 16 banks had met regulatory requirements.

The CBN governor said the global economy was recovering in the medium term, noting that though trade tensions between the U.S. and key trading partners might constrain growth.