The Central Bank of Nigeria has held its benchmark lending rate at 27.50 per cent, marking the first time it has opted to maintain the rate in almost three years.

CBN Governor Olayemi Cardoso disclosed this while addressing journalists at the end of a two-day MPC meeting held in Abuja.

CBN had been persistent in raising the lending rates since March 2022 when the rate stood at 11.5 per cent.

The Monetary Policy Committee (MPC) of the bank stated on Thursday that its unanimous decision was influenced by recent macroeconomic developments, which it noted with satisfaction.

These include stability in the foreign exchange market, leading to an appreciation of the exchange rate, and the gradual moderation in PMS prices, both of which are expected to positively impact price dynamics in the near to medium term.

The benchmark rate is the standard interest rate set by central banks, used to guide lending rates and influence economic activities, inflation, and financial stability.

The central bank also retained the asymmetric corridor around the MPR at +500 to -100 basis points.

Mr Cardoso said the committee voted to retain the Cash Reserve Ratio (CRR) at 50 per cent for commercial banks, while maintaining the CRR of merchant banks at 16 per cent.

The committee also voted to retain the liquidity ratio at 30 per cent.

The new development follows the National Bureau of Statistics‘ (NBS) announcement that Nigeria’s annual inflation rate stood at 24.48 per cent in January, based on a rebased Consumer Price Index (CPI) with 2024 as the new base year.

The NBS also revised the composition of the consumer basket and adjusted the weights assigned to its components.

The CBN has continued tightening monetary policy to curb inflation, implementing a series of interest rate hikes throughout 2024. These decisions were aimed at stabilizing the economy amid persistent price pressures.

In 2024, the bank raised rates six times, delivering a cumulative increase of 875 basis points.

Despite these measures, inflation remained elevated, influenced by factors such as exchange rate fluctuations, subsidy removal, and supply chain disruptions.

Mr Cardoso, however, said members acknowledged the risk of persistent inflationary pressures, largely driven by food prices.

The committee also noted the recent rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), which adjusted the weights of items in the consumption basket to reflect current consumption patterns.

Also, the committee observed that as the federal government enhances security in food-producing areas and implements other measures to boost food supply, food prices are expected to moderate further.

“The committee highlighted the benefits of the improvements in the external sector to exchange rate stability, including the convergence of race between the Nigeria foreign exchange market and the Bureau to change and urge the bank to relent, not to relent in its effort to boost market liquidity,” Mr Cardoso said.