Nigeria’s Inflation Drops to 18.02% — Lowest in Three Years as CBN’s Tight Policies Pay Off
Nigeria’s inflation rate has fallen to 18.02% in September 2025, the lowest level in three years, according to fresh data from the National Bureau of Statistics (NBS). The decline marks the sixth consecutive month of easing price pressures, driven by the Central Bank of Nigeria’s (CBN) sustained efforts to stabilize the economy. Core inflation slowed to 19.53%, while food inflation — a major burden for households — dropped to 16.87%, suggesting relief across key consumer segments.
The latest figures represent a remarkable turnaround from the record-high inflation rate of 34.19% in June 2024, a period marked by steep food and fuel costs. To contain the surge, the CBN embarked on one of its most aggressive tightening cycles in decades, raising the Monetary Policy Rate (MPR) from 18.75% to 27.50% and increasing the Cash Reserve Ratio (CRR) to 50% for commercial banks. The Bank’s decisive stance aimed to rein in liquidity, strengthen the naira, and restore investor confidence in the Nigerian economy.
With inflation showing consistent moderation, the CBN took a cautious step in September, trimming the MPR by 50 basis points to 27.00% and reducing the CRR for commercial banks to 45%. Despite this slight policy relaxation, the Bank maintained what it described as a “firm anti-inflationary posture.” The move signals growing confidence in the effectiveness of earlier monetary measures while ensuring that inflation expectations remain anchored.
Complementary reforms in the foreign exchange market have also played a crucial role in stabilizing the macroeconomic environment. The unification of exchange rates and improved transparency have narrowed the gap between official and parallel market rates to below 2%, reducing opportunities for arbitrage and curbing imported inflation. Nigeria’s foreign reserves remain robust at over $43 billion, providing more than 11 months of import cover, backed by steady foreign exchange inflows and renewed market confidence.
Speaking at the IMF–World Bank Annual Meetings in Washington, D.C., CBN Governor Olayemi Cardoso expressed optimism about the trajectory of Nigeria’s economy. “We expect inflation to continue to trend downward in the near term, supported by tight monetary conditions, a stable naira, and increased food supply,” he said. The Bank reaffirmed its commitment to sustaining gains through exchange rate stability, agricultural productivity, and stable energy prices — key elements underpinning Nigeria’s ongoing disinflation path.
source: the sun