Nigeria’s Monetary Policy Committee (MPC) is preparing for its February 23–24 meeting amid growing debate over whether to cut the benchmark Monetary Policy Rate (MPR) or maintain the current 27.0%. Analysts are closely watching improvements in macroeconomic indicators, including declining inflation and a stronger naira, as the Committee weighs its next move.
Headline inflation fell to 15.1% in January 2026, marking eleven consecutive months of disinflation. Experts say this sustained moderation, combined with stable energy prices and strengthening external buffers, provides the Central Bank of Nigeria (CBN) with more flexibility to consider easing policy. Yet some caution that price pressures alone may not justify an immediate cut.
Analysts such as Asimiyu Damilare, Head of Research at Afrinvest West Africa, highlight the growing case for a rate reduction. He points to rising foreign reserves, which hit $47.8 billion in January, and a 6.7% naira appreciation in the official market, which together create room for a policy pivot. Historical voting patterns from the November 2025 MPC meeting, where a narrow majority opposed a rate cut, suggest the Committee may be increasingly receptive to normalization.
Other experts remain cautious. The MD/CEO of Arthur Steven Asset Management warns that rising system liquidity could sustain inflationary pressures, while CFG Africa’s Olumayowa Bolujoko stresses that election-cycle spending and the need to maintain attractive yields for foreign investors may influence the MPC to hold rates. These views underscore that macroeconomic improvements alone may not guarantee immediate easing.
Overall, the MPC faces a classic policy trade-off: sustained disinflation and a stronger external position favor a gradual rate cut, yet liquidity concerns and strategic capital flow considerations argue for caution. Analysts predict the Committee may hold the MPR at 27.0% for now while signaling a dovish bias, with a potential policy pivot in subsequent meetings depending on the durability of disinflation and external stability.
source: nairametrics