Five members of the Central Bank of Nigeria’s Monetary Policy Committee (MPC) voted for a 50-basis-point cut in the Monetary Policy Rate (MPR) at the November 2025 meeting, citing sustained disinflation, improving external buffers, and resilient economic growth.
According to their personal statements published by the apex bank, the five members, who represent 41.7 per cent of the 12-member committee, proposed reducing the MPR from 27.0 per cent to 26.5 per cent and adjusting the asymmetric corridor to +50/-450 basis points, while retaining all other prudential parameters.
By majority, however, the committee voted to retain the policy rate at 27.0 per cent, reflecting continued caution over inflation risks despite recent macroeconomic improvements.
ALSO READ CBN: Banks to cut fraud response time to under 30 minutes
ALSO READ CBN: Banks’ loan portfolio hits 14-month low at ₦52.66trn
Why they voted for easing
Aku Pauline Odinkemelu said Nigeria’s disinflation process had become “entrenched and broad-based,” pointing to seven consecutive months of headline inflation slowdown, improved food supply conditions, and rising external reserves. She argued that a modest rate cut would support recovery in the productive sector without undermining price stability, especially with tight liquidity controls still in place.
On his part, Aloysius Uche Ordu, anchored his vote on global and domestic trends, noting that several advanced and emerging market central banks had begun cautious easing cycles amid moderating inflation. He cited Nigeria’s improved external position, stronger capital inflows, a stable exchange rate, and declining inflation as justification for a calibrated reduction rather than aggressive loosening.
Bandele A. G. Amoo supported easing to address weak credit transmission to the real economy. While acknowledging persistent inflation risks, he said a small policy rate cut, reinforced by strict cash reserve requirements, could encourage banks to lend more to productive sectors such as agriculture and manufacturing, especially ahead of seasonal demand pressures.
Former Director-General of the Securities and Exchange Commission (SEC) and current MPC member, Lamido Abubakar Yuguda, described the case for easing as “compelling,” citing significant progress in inflation moderation, robust non-oil sector growth, and improving foreign reserves. He stressed that the proposed cut was modest and forward-looking, aimed at consolidating growth momentum while preserving monetary discipline through tight reserve and liquidity ratios.
Murtala Sabo Sagagi framed his vote around growth and liquidity dynamics, noting that the lagged effects of earlier tightening were already yielding results. He argued that a calibrated reduction would help stimulate inclusive growth, while the asymmetric corridor would prevent excess liquidity from destabilising the exchange rate or reigniting inflation.
Other policy tools retained
Despite differences on the MPR, all five members supported retaining other key policy tools.
They backed keeping the Cash Reserve Ratio at 45 per cent for deposit money banks, 16 per cent for merchant banks, and 75 per cent on non-TSA public sector deposits, while maintaining the Liquidity Ratio at 30 per cent.
They also endorsed narrowing the standing facilities corridor to +50/-450 basis points, arguing that the structure would discourage banks from parking idle funds at the CBN and promote interbank activity and real-sector lending.
Majority stance
The majority of MPC members opted to retain the MPR at 27 per cent, emphasising the need to sustain gains from previous tightening, especially with inflation still in double digits and fiscal-driven liquidity risks looming.
The committee noted that while headline inflation eased to 16.05 per cent in October 2025, risks remained from seasonal spending, election-related fiscal pressures, and potential exchange-rate shocks.
Maintaining the current stance, the MPC said, would allow the full transmission of earlier policy actions while anchoring inflation expectations.
The voting pattern highlights a growing internal debate within the MPC as macroeconomic conditions improve. While the majority remains cautious, the sizeable minority advocating easing suggests that future meetings could tilt toward gradual rate cuts if disinflation persists and external stability holds.
The next MPC meeting is scheduled for February 23 and 24, 2026, with analysts projecting a possible rate cut if inflation continues to moderate after settling at 15.15 per cent in December 2025.
