Nigeria’s Monetary Policy Committee (MPC) is widely expected to leave the benchmark interest rate unchanged at 26.50 per cent when it concludes its two-day meeting this week, as policymakers weigh lingering inflationary pressures against signs of economic recovery. Analysts at Meristem Research believe the Central Bank of Nigeria (CBN) will prioritize stability, choosing to maintain its current monetary stance rather than introduce fresh tightening measures or begin easing rates prematurely.
The forecast comes despite a slight improvement in Nigeria’s inflation figures. Headline inflation eased to 15.91 per cent in June 2026, marking its first decline in three months. However, the relief may be short-lived as food inflation continued to climb, reaching 17.52 per cent. While lower transportation costs helped moderate core inflation, rising food prices remain a major concern for households and businesses across the country, highlighting persistent supply-side challenges in the economy.
Beyond Nigeria’s borders, global developments are adding fresh uncertainty to the economic outlook. A temporary ceasefire in the Middle East had earlier pushed Brent crude prices down to around $72 per barrel, but renewed tensions in the region and concerns over the strategic Strait of Hormuz have driven oil prices above $85 per barrel once again. Analysts warn that higher energy costs could trigger another wave of imported inflation, making it difficult for the CBN to justify any immediate rate cuts.
At the same time, Nigeria’s economy is showing signs of resilience. The CBN Composite Purchasing Managers’ Index (PMI) edged up to 50.10 points in June, indicating a return to private sector expansion. The oil sector also delivered encouraging news, with crude production rising to 1.53 million barrels per day—surpassing Nigeria’s OPEC production quota for the first time in ten months. These developments suggest that economic activity is gradually improving despite ongoing domestic and international pressures.
Meristem analysts argue that keeping rates unchanged remains the most balanced option for policymakers. With the Federal Government facing significant debt obligations estimated at N15.81 trillion in 2026, a rate cut could weaken investor appetite for government securities, while a rate hike would increase borrowing costs. As a result, the firm expects the MPC to retain all major policy parameters, including the Monetary Policy Rate at 26.50 per cent, the liquidity ratio at 30.00 per cent, and the Cash Reserve Ratio at 45.00 per cent, when the committee concludes its meeting on July 21. The decision will be closely watched by investors, businesses, and millions of Nigerians eager for signs of lasting economic stability.
source: punch
