CBN Retains MPR at 27%, Adjusts Corridor as Experts Assess Impact on Nigerians and Small Businesses

CBN Governor Olayemi Cardoso

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday voted to maintain its tight monetary stance, keeping the Monetary Policy Rate (MPR) unchanged at 27.0%. The Committee, however, introduced a major tweak to its liquidity management structure by adjusting the asymmetric corridor around the benchmark rate to +50/-450 basis points, from the previous +250/-250 basis points.

All other key policy parameters were retained:

• Cash Reserve Ratio (CRR):
  • Deposit Money Banks — 45%
  • Merchant Banks — 16%
  • Non-TSA Public Sector Deposits — 75%
• Liquidity Ratio: 30%

CBN Governor Olayemi Cardoso said the decisions reflect the MPC’s determination to tame inflation, stabilize the exchange rate, and restore investor confidence amid persistent price pressures and global economic uncertainties.

A YEAR OF TOUGH MONETARY CHOICES

Throughout 2024 and 2025, the CBN has maintained one of the most aggressive tightening cycles in Africa to counter inflationary pressures that have consistently challenged households and businesses. With inflation still elevated, the MPC opted for stability rather than another rate hike, signalling caution in a fragile recovery phase.

The corridor adjustment, analysts say, gives the CBN tighter control over interbank market liquidity, ensuring short-term rates remain aligned with the MPR and reducing speculative distortions that previously pressured the naira.

WHAT THIS MEANS FOR NIGERIANS

Inflation: Slow but Steady Relief

While the MPR remains high, experts believe the decision supports the gradual downward trend in inflation. Nigerians may not feel immediate relief, but the move helps reduce sharp fluctuations in food and transport costs, two areas where price volatility hits households hardest.

Small Businesses: Credit Still Costly

For small and medium-scale enterprises (SMEs), high interest rates continue to limit access to affordable loans. The tight corridor and CRR retention mean banks will continue to lend cautiously.

However, economic analysts insist that a more stable exchange rate environment may prove beneficial to SMEs that rely on imports or operate in price-sensitive markets.

EXPERT REACTIONS

Celestine Ukpong — Economist

“This was a stability-focused decision. The MPC avoided pushing the economy into deeper strain while still closing liquidity gaps. High borrowing costs remain an issue, but inflation control helps the poorest Nigerians first.”

Peter Adebayo — Chartered Accountant

“Small businesses will still struggle with credit, no doubt. But a stable naira gives traders, transport operators, and even market women the ability to plan better. Predictability is a major economic relief.”

Dr. Mojisola Ayeni — Development Finance Consultant

“Interventions cannot succeed in an unstable price environment. The CBN is building the groundwork. Once inflation stabilizes, lending costs will naturally ease.”

LOOKING AHEAD

The MPC’s decision underscores the CBN’s priority: price stability over aggressive growth. For Nigerians on the streets, the impact may be gradual, but experts agree the policies remain crucial to restoring economic balance and supporting long-term recovery.

The CBN’s MPC has held the MPR at 27% and tightened the policy corridor to stabilize inflation and the naira. Experts break down what the decision means for Nigerians and small businesses across the country.