The Central Bank of Nigeria, CBN, will decide the new lending rate at its latest Monetary Policy Committee meeting. The meeting, which holds from May 19 to 20, 2025, will see the apex bank raise, reduce or keep the interest rate at 27.50 percent.
This comes as Nigeria’s inflation dropped in April to 23.7 percent, according to the National Bureau of Statistics consumer price index report released last week on Thursday.
The decline in the country’s inflation influenced the financial expert’s stance that the MPC would retain monetary policy parameters, including the interest rate at 27.50.
Also, official Nigeria’s exchange rate data from the Central Bank of Nigeria showed that the naira stood at N1,598.72 per dollar but N1,635 at the parallel foreign exchange market on Friday last week.
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No doubt, Nigeria’s current economic situation portends a difficult tax on MPC members.
Meanwhile, according to a renowned economist and chief executive officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, the MPC should rule out monetary policy tightening.
He said “The tightening option, I don’t think that should be on the table for now because the rates are already very high, the cash reserve ratio is already 50 percent, which is the highest anywhere in the world, and the MPR is already 27.5 is one of the highest anywhere in the world.
“The asymmetric corridor is +500 basis points around the MPR, and it is also very high because when you look at the asymmetric corridor of 500 basis points, that means the MPR itself can go as high as 32.5.
“That’s what it means. So, the rates are already on the high side; I don’t think we need to be looking at the turnoff for that,” he added.
