Nigeria’s fight against inflation faces a crucial test as the Monetary Policy Committee (MPC) gathers in Abuja for its 302nd meeting.
For three consecutive sessions, the committee has kept the benchmark interest rate at 27.50%.
However, recent declines in inflation have rekindled debate over whether it should loosen policy.
Headline inflation fell for the fifth consecutive month in August, sliding to 20.12% from 21.88% in July.
Consequently, many economists interpret this as a sign that price pressures may finally be easing.
“The improvement points to a gradual return to price stability, raising hopes that the CBN may start to ease its tight monetary stance,” said CEO of the Centre for the Promotion of Private Enterprise, Muda Yusuf.
Diverging Expectations
Market expectations remain divided.
Moreover, of 12 economists surveyed by business analyst, eight predict that the MPC will maintain rates, three foresee a slight reduction to 27.25%, and one anticipates a cut to 27.00%.
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Some experts see room for cautious easing.
Razia Khan of Standard Chartered Bank highlighted lower food and fuel inflation and a stable naira as supports for gradual cuts.
She projects a 150-basis-point reduction across September and November, with more in 2026–2027.
Similarly, United Capital Research expects a modest 0.25–0.50% cut, signalling confidence in disinflation while maintaining credibility.
Caution Prevails
Yet other experts warn against moving too quickly.
However, Afreximbank’s Yemi Kale stressed that inflation remains high and that current rates attract foreign inflows, which help stabilise the FX market.
Likewise, Coronation Merchant Bank expects the MPC to hold steady until disinflation proves sustainable.
As the MPC deliberates, markets, businesses, and households watch closely.
Ultimately, the committee must decide whether to take a cautious step toward growth or continue prioritising stability, a choice that will shape Nigeria’s economic path in the months ahead.
