CBN MPC Meeting: Slowing Inflation Sparks Mixed Rate-Cut Expectations Among Economists
Nigeria’s slowing inflation has created a divide among economists as the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) begins its 302nd meeting in Abuja today. The two-day gathering will determine whether the benchmark interest rate, held steady at 27.50% for three consecutive meetings, will be maintained or cut to support growth. The outcome is closely watched by businesses, investors, and market participants looking for signals on the CBN’s next move.
Out of 12 economists surveyed by BusinessDay, eight expect the MPC to hold the Monetary Policy Rate at 27.50%, while three forecast a small cut to 27.25%, and one predicts a deeper reduction to 27.00%. The debate stems from Nigeria’s headline inflation easing for the fifth consecutive month, dropping to 20.12% in August from 21.88% in July — its sharpest monthly fall in over a year.
Some analysts believe this disinflation trend could pave the way for monetary easing. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), said the improvement signals “a gradual return to price stability,” raising hopes for a looser policy stance. Razia Khan, Standard Chartered’s chief economist for Africa and the Middle East, also highlighted that tighter policy, a stable naira, and falling food and fuel inflation support the case for a cautious easing cycle starting this year.
Other experts urge restraint, warning that inflation — though lower — remains elevated and could rebound. Yemi Kale, Afreximbank’s group chief economist, noted that keeping rates high has attracted foreign portfolio inflows that stabilized the FX market and built reserves. Analysts at Coronation Merchant Bank echoed that view, stressing the MPC should ensure the recent price moderation is sustainable before easing, to protect hard-won credibility and maintain investor confidence in fixed-income markets.
Research houses remain split on the likely outcome. United Capital and Comercio Partners forecast a modest rate cut of 25–50 basis points to boost economic activity, while Afrinvest West Africa expects a reduction later in the year if disinflation continues. Whatever decision emerges from the MPC’s September meeting, it will signal how the CBN balances its twin goals of stabilizing prices and stimulating growth in Africa’s largest economy.
source: business news