Abuja, November 26, 2025 – The Central Bank of Nigeria (CBN) has opted to maintain its benchmark Monetary Policy Rate (MPR) at 27 percent, extending a cautious pause on further monetary adjustments as inflation continues its seventh consecutive month of deceleration. The decision, announced by CBN Governor Olayemi Cardoso at the conclusion of the Monetary Policy Committee’s (MPC) 303rd meeting in Abuja on Tuesday, underscores the apex bank’s commitment to price stability amid a fragile economic recovery. In parallel developments, the CBN revealed that 16 banks have fully complied with the ongoing recapitalization requirements, while an audit of legacy intervention programs has recovered approximately ₦2 trillion, though ₦4.69 trillion in outstanding debts continues to constrain the launch of new initiatives.
Steady Rates Amid Easing Inflation Pressures
The MPC’s unanimous vote to retain the MPR at 27 percent marks the fourth consecutive hold since a modest 50-basis-point reduction in September 2025—the first cut in over three years following an aggressive tightening cycle that cumulatively raised rates by 1,000 basis points from February 2023 to May 2025. This tightening phase was aimed at combating inflation that had surged above 30 percent before a rebasing of the Consumer Price Index (CPI).
Governor Cardoso highlighted the “steady deceleration in headline, core, and food inflation” recorded in October 2025, with headline inflation easing to 16.05 percent year-on-year—its softest level since March 2022. “The committee welcomed the continued deceleration in headline inflation for the seventh consecutive month,” Cardoso stated during the post-meeting press briefing. He attributed this progress to sustained monetary tightening, a stable exchange rate, increased capital inflows, and a surplus current account balance, noting that previous policy measures are expected to yield further gains in the near term.
Other key parameters remained unchanged: the asymmetric corridor around the MPR at +50 basis points/-450 basis points (adjusted from the previous +250/-250), liquidity ratio at 30 percent, and Cash Reserve Ratios (CRR) at 45 percent for Deposit Money Banks, 16 percent for merchant banks, and 75 percent for non-Treasury Single Account (TSA) public sector deposits. The MPC expressed satisfaction with the banking sector’s resilience, as most financial soundness indicators remain within regulatory thresholds, including a Purchasing Managers’ Index (PMI) that rose to 56.4 points in November 2025—the highest in five years—signaling robust economic expansion in the third and fourth quarters.
On the global front, Cardoso pointed to a projected medium-term recovery, supported by improved trade negotiations, accommodative monetary policies in advanced economies, and easing geopolitical tensions, though potential U.S. trade frictions with key partners could pose constraints. Gross external reserves also bolstered optimism, climbing 9.19 percent to $46.70 billion as of November 14, 2025, from $42.77 billion at the end of September—sufficient to cover 10.3 months of imports for goods and services.
Recapitalization Milestone: 16 Banks Fully Compliant
In a significant boost to the financial sector’s stability, the CBN confirmed that 16 out of Nigeria’s 44 deposit-taking banks have achieved full compliance with the revised minimum capital requirements introduced in March 2024. These thresholds—₦500 billion for commercial banks with international authorization, ₦200 billion for national authorization, ₦50 billion for regional authorization, and corresponding adjustments for non-interest and merchant banks—aim to enhance banks’ capacity to absorb shocks, support economic growth, and foster competitiveness in a volatile global environment.
Governor Cardoso described the recapitalization exercise as “unfolding smoothly and in line with expectations,” with the MPC acknowledging “substantial progress.” As of the latest update, an additional 27 banks have raised capital through rights issues, mergers, and private placements, injecting an estimated ₦800 billion to ₦900 billion into the system in the first half of 2025 alone. “We are monitoring developments, and indications show the process is moving in the right direction,” Cardoso said, emphasizing that the initiative will strengthen banks’ buffers for operations both domestically and across African borders, benefiting Nigerian traders and businesses.
The recapitalization, set to conclude by March 31, 2026, has already seen mergers like that of Union Bank and Titan Trust Bank, alongside capital raises by major players such as Access Bank, Zenith Bank, Ecobank Nigeria, and Jaiz Bank. Analysts project total fresh capital mobilization could reach ₦3.4 trillion by year-end, positioning the sector for higher revenues in a high-yield environment while addressing risks from elevated operating, credit, and currency pressures.
Intervention Audit Yields ₦2 Trillion Recovery, But ₦4.69 Trillion Outstanding Ties Hands
A comprehensive audit of CBN’s development finance interventions from 2010 onward revealed total disbursements of ₦10.93 trillion across sectors, with approximately ₦2 trillion recovered under the current administration through rigorous repayment enforcement and collaboration with agencies like the Economic and Financial Crimes Commission (EFCC) and the Ministry of Finance. However, ₦4.69 trillion—about 43 percent of the total—remains unpaid, described by Cardoso as a “humongous amount” that severely limits the bank’s fiscal flexibility.
“This outstanding balance really and truly ties our hands in terms of additional interventions,” Cardoso explained, warning that resuming such programs could destabilize the economy, as past excesses led to market distortions and moral hazards that stifled private sector competition. The CBN has shifted focus to evidence-based policies that encourage private investment, suspending new applications for intervention funds and tasking commercial banks with recovering outstanding loans. This approach, Cardoso noted, has paradoxically supported stability by curbing inflationary financing.
The MPC urged continued implementation of the recapitalization and intervention wind-down to build long-term resilience, with Cardoso reaffirming the CBN’s mandate to protect price stability and fortify the financial system.
As Nigeria navigates these policy pivots, market analysts anticipate sustained investor confidence, though the high MPR continues to elevate lending costs for businesses and households. The Nigerian equities market responded positively, rebounding by ₦95 billion on Tuesday, buoyed by the policy continuity.
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CBN Holds Interest Rates Steady at 27% to Sustain Inflation Fight; 16 Banks Achieve Full Recapitalization Amid Intervention Recovery Challenges
