As the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) prepares to hold its second two-day meeting of the year beginning Monday, May 19, 2025, most analysts are aligning their expectations toward a “hold” decision on the benchmark interest rate, rather than any increase or significant easing.
The CBN had earlier issued a formal notice on Tuesday announcing the 300th meeting of the MPC, scheduled to take place in Abuja on May 19 and 20, 2025.
Analysts and market watchers are broadly aligned in their expectations that the committee will likely maintain the current monetary policy rate (MPR), though there remains some speculation about a possible tweak to the asymmetric corridor surrounding the MPR.
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The consensus appears to be that while the inflation trajectory is improving and global pressures are easing, domestic uncertainties and a cautious approach by the CBN are likely to tip the scale in favor of a hold.
Charlie Robertson, chief economic advisor to the Group CEO at Equity Group Holdings PLC, underscored the rationale behind this position, pointing to prevailing market conditions and the influence of external developments. “I suspect no change from the CBN at present, given market volatility, the Fed pause, and recent pressure on the naira,” he said, indicating that the environment does not yet warrant any aggressive policy shift.
Similarly, Ayodele Akinwunmi, senior relationship Manager at FSDH Merchant Bank, believes that the CBN has little justification for an upward rate adjustment at this time. “The choice open to the MPC at this meeting is either to hold rates or reduce them, with a higher probability of holding rates at current levels,” he said. He emphasised that current conditions support a more measured approach. “No justification for an increase in rates at this meeting,” he insisted, further explaining that “the MPC may adjust the asymmetric corridor around the MPR.”
Akinwunmi noted that Nigeria’s inflation rate, which eased to 23.7 percent in April 2025 from 24.2 percent in March, according to figures released by the National Bureau of Statistics (NBS), is a critical factor influencing expectations. He also pointed to a broader, more stable global environment, citing recent decisions by U.S. President Donald Trump to suspend or reverse certain tariffs, particularly those involving China. “This is providing clearer direction on markets and the global economy. This will also have positive impacts on the Nigerian economy,” he said. He concluded that “there is therefore a higher probability that the MPC will wait a bit longer to signal a change in monetary policy stance. So a hold decision will be appropriate at this meeting.”
Echoing the prevailing sentiment, Ayokunle Olubunmi, head of Financial Institution Ratings at Agusto & Co., stated succinctly, “I expect the MPC to maintain rates and hold all parameters.”
Razia Khan, managing director and chief economist for Africa and the Middle East at Standard Chartered Bank, offered a slightly more forward-looking view. While she agrees that an immediate policy shift is unlikely, she sees the potential for easing later in the year. “We expect the CBN to start easing in H2-2025,” she said, but added that “a faster-than-expected improvement in inflation could see the date of the first rate cut brought forward.”
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Nigeria’s recent inflation data supports this cautiously optimistic view. The latest figures from the NBS show that inflation eased to 23.7 percent in April, a notable decline from the 24.2 percent recorded in March. This marks a second consecutive month of moderation, suggesting that the monetary tightening cycle may finally be gaining traction.
At its previous meeting held on February 19 and 20, 2025, the MPC opted to leave the policy rate and other monetary parameters unchanged, signaling a pause after an extended period of aggressive rate hikes.
Over the past five years, the CBN has more than doubled the MPR from 11.50 percent in 2021 to 27.50 percent as of March 2025. A large portion of that adjustment occurred in the past year alone, during which the rate was increased by an extraordinary 875 basis points in a bid to bring soaring inflation under control.
CBN Governor Olayemi Cardoso has consistently emphasised the importance of maintaining an orthodox monetary policy stance, stressing that the policy direction is beginning to yield positive outcomes.
Speaking last Monday at the launch of the World Bank’s ‘Nigeria Development Update’ in Abuja, Cardoso reaffirmed his commitment to this framework. “If we continue with our course of orthodox monetary policy, which has already shown results, then inflation will moderate over time. Alongside that, interest rates will also begin to ease,” he said, indicating that a shift in policy stance would be considered only when the underlying economic indicators provide clear justification.
With inflation gradually easing, global uncertainties receding, and the CBN signaling patience and commitment to orthodoxy, a consensus hold appears to be the most probable outcome of the May MPC meeting, even as subtle tweaks to policy tools remain on the table.
