By Taiye Olayemi
Some economists have welcomed the Central Bank of Nigeria’s decision to retain the Monetary Policy Rate at 27 per cent.
They spoke in separate interviews on Thursday with the News Agency of Nigeria (NAN), describing the move as timely and prudent.
NAN reports that the Monetary Policy Committee (MPC) reached the decision during its recently concluded 303rd meeting held in Abuja.
The committee said the decision reflected the need to maintain monetary stability while monitoring emerging pressures in the domestic and global economic environment.
It also retained the Cash Reserve Ratio (CRP) at 45 per cent for commercial banks and 16 per cent for merchant banks, noting the importance of liquidity control.
In addition, the MPC maintained the 75 per cent CRR on non-TSA public sector deposits to strengthen discipline in handling government-related funds.
The liquidity ratio stayed unchanged at 30 per cent, while the Standing Facilities Corridor was adjusted to +50 and -450 basis points around the MPR.
Analysts said the changes aimed to improve monetary transmission and encourage more responsible lending behaviour within the banking sector.
Investment banker, Mr Tajudeen Olayinka, said the adjustment of the corridor was targeted directly at banks to improve overall market responsiveness.
He said the new structure would encourage banks to offer lower lending rates to non-bank players, thereby supporting economic activity.
According to him, the 22.5 per cent Standing Deposit Facility makes the CBN window more attractive and profitable for banks needing safe short-term placements.
He added that the measure would help market forces moderate lending rates in a more sustainable manner, while improving monetary stability.
Olayinka noted that the MPC remained cautious about the potential impact of lower rates on foreign reserves and portfolio inflows.
He said insecurity and global uncertainties required careful calibration of policy to prevent capital flight and maintain exchange rate stability.
According to him, the retention of the CRR reflected the MPC’s view that excess liquidity remained a key concern for the apex bank.
He added that maintaining the liquidity ratio would support overall financial stability, especially with tightening global financial conditions.
“Financial system stability may not be guaranteed with a lower liquidity ratio now. This step helps manage the delicate balance,” he said.
Also, the Managing Director of Globalview Capital Ltd, Mr Kebira Aruna, said the MPC’s adjustment aligned with recent declines in inflation.
He said the committee acted cautiously to avoid undermining gains achieved in price stability over recent months.
However, he warned that further rate cuts could be risky as the country approaches the 2026 pre-election year.
He said election periods often witness increased liquidity, which could trigger inflation and weaken policy transmission.
He said: “It will be risky to continue reducing the rate without caution, as 2026 is a pre-election year.
“In such periods, funds previously outside the system usually return and may fuel inflation if not properly managed.”
He added that any further rate reductions should be preceded by consistent inflation monitoring for at least one quarter.
The Vice President of Highcap Securities, Mr David Adonri, also described the MPC’s decision as wise and necessary amid current economic pressures.
He said the measures would help sustain investor confidence while government addresses structural issues affecting growth and stability.
According to him, monetary policy cannot be relaxed further without risking financial instability and renewed inflationary pressures.
“Retention of the policy parameters is wise. With present challenges, policy cannot be eased further,” he said.
He said maintaining the existing parameters would help the economy resist emerging threats and preserve investor trust.
“Investors are expected to react positively and maintain confidence as government tackles the root causes,” he added.
Adonri stressed that the MPC’s caution was essential to preserve gains in price stability and protect financial market integrity.
He said sustained coordination between fiscal and monetary authorities remained critical for achieving long-term economic resilience.
