As Nigeria’s Monetary Policy Committee (MPC) prepares for its next meeting, analysts are predicting that the Central Bank of Nigeria (CBN) will opt for a 50 basis point cut in interest rates to stimulate economic growth.
The decision comes amid easing inflationary pressures, improving naira stability, and a shift toward monetary easing in advanced economies, particularly the U.S. Federal Reserve’s recent 25bps cut.
Currently, the Monetary Policy Rate (MPR) is at 27.50%. Analysts believe lowering it to 27.00% could encourage private sector borrowing, expand industrial capacity, and boost real-sector growth.
Cordros Capital Limited, in a pre-MPC note, highlighted that improved FX liquidity, stronger portfolio inflows, and moderating inflation provide room for easing. However, the firm stressed that the CBN would likely adopt a cautious approach, ensuring interest rates remain attractive to foreign investors while anchoring inflation expectations.
Cowry Asset Management also pointed to risks from FX pass-through, food supply bottlenecks, and oil price volatility as reasons the MPC may avoid aggressive easing.
Nigeria’s headline inflation slowed to 20.12% in August 2025 from 21.88% in July—the lowest since April 2023—driven by stable FX, lower energy costs, and favourable base effects. Month-on-month inflation also eased significantly to 0.74% from 1.99%.
Economists say the downward trend in inflation may provide the MPC with enough confidence to implement a symbolic rate cut, reinforcing optimism in the disinflation trajectory.
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