MPC Members Divided On November Rate Cut

Members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) were split at the November 2025 meeting over whether to begin a cautious easing cycle or keep rates unchanged to consolidate recent macroeconomic gains.

The personal statements of the members as released by the apex bank showed that while 12 members were present at the meeting, 11 had voted, of which five members had voted for a rate cut, as against six that voted to keep rates unchanged.

While the committee as a whole voted by majority to retain the Monetary Policy Rate at 27 per cent, personal statements from the members showed a divide between members who favoured a modest rate cut to support growth and those who preferred to keep rates unchanged to anchor inflation expectations and guard against emerging risks.

The CBN governor, Olayemi Cardoso had led the train of those who believed holding monetary policy rates at current levels best supports the disinflationary progress that had been achieved by the CBN. Inflation had been on a decline, standing at 16.05 per cent in October just before the decision was taken, down from 18.02 per cent in the preceding month and 8.43 percentage points below the 24.48 per cent recorded in January 2025.

Also arguing that it was too early to declare victory over inflation, Bala Moh’d Bello had voted to hold rates, citing the need to preserve recent gains from earlier tightening. He highlighted Nigeria’s removal from the FATF grey list, upgrades in sovereign credit ratings, exchange rate stability and rising external reserves as achievements that should not be put at risk.

“The current levels of key policy parameters are suitable and would prevent the disruption of the ongoing transmission of previous policies,” he said, adding that inflation, though declining, remained above the target range.

Emem Usoro also favoured retaining the MPR, stressing that inflation expectations were yet to be fully anchored and that the exchange rate remained vulnerable to seasonal and external shocks. He argued that maintaining a restrictive stance would reinforce anti-inflation signalling, while adjusting the corridor would discourage banks from passively parking liquidity. “Maintaining the Monetary Policy Rate at 27 per cent supports the disinflation trajectory without jeopardising recent gains,” Usoro said.

Likewise, Lydia Jafiya voted to keep all parameters unchanged, pointing to upside risks to the inflation outlook from year-end festivities and pre-election spending. While acknowledging that macroeconomic conditions had improved, she said policy space remained constrained. “With inflation still elevated at 16.05 per cent, there is a need to tread cautiously as risks to the outlook are on the upside,” she said, insisting that a hold decision was appropriate while monitoring emerging risks.

Muhammad Sani Abdullahi also backed a hold, warning that excess liquidity in the banking system could undermine the effectiveness of policy. He argued that additional tightening could harm the recovery, but that easing at this stage was unnecessary, as previous measures were still transmitting. “The current stance is appropriately restrictive and no further action is warranted at this time,” he said, adding that inflation, output and exchange rate indicators were all responding gradually to policy tightening.

On the other side of the divide, Aku Odinkemelu voted for a 50 basis point cut in the policy rate to 26.5 per cent, arguing that Nigeria had entered a window for calibrated easing. She said the disinflation trend was now “entrenched and broad-based”, noting that headline inflation had declined for seven consecutive months to 16.05 per cent in October 2025.

According to her, improved food supply, a stable exchange rate and more substantial external reserves provided policy space for a cautious adjustment. “A 50bps reduction in the MPR at this juncture is a prudent, forward-looking adjustment that acknowledges the hard-won gains in price stability and external resilience,” she said, adding that tight reserve requirements should remain to prevent excess liquidity from undermining stability.

Aloysius Uche Ordu also supported a 50-basis-point cut, citing easing global conditions and improving domestic fundamentals. He pointed to eight consecutive months of inflation moderation, a strengthening naira and rising foreign reserves as evidence that the macroeconomic narrative had shifted. However, he cautioned against aggressive easing.

“This is not a time for rapid loosening of policy,” Ordu said, stressing that the fight against inflation “is a marathon, not a sprint”, and that policy credibility must be preserved even while supporting growth through a cautious adjustment.

Bandele Amoo likewise aligned with the easing camp, voting to reduce the policy rate to 26.5 per cent. He argued that while inflation remained elevated, the steady disinflation path and resilient growth across agriculture, services and manufacturing justified a modest rate cut.

Amoo expressed concern about liquidity driven by fiscal policy, especially ahead of the 2026 budget cycle and the buildup to the 2027 elections. “A small ease in MPR, strongly reinforced by adjusted rate corridors, will strengthen critical sectors and help moderate the risk of high inflation expectations,” he said

Lamido Abubakar Yuguda similarly voted for a 50 basis point cut, describing the recent fall in inflation as “substantial and broad-based. He said the seventh consecutive decline in headline inflation, alongside stable exchange rates and improved reserves, supported a carefully calibrated easing.

Yuguda noted that growth was being driven mainly by non-oil sectors and that global monetary conditions were turning more accommodative. “The modest rate reduction reflects a nuanced assessment of Nigeria’s current economic position,” he said, while warning that fiscal spending and exchange rate pressures still required close monitoring.