NIGERIA’S MPC CONSIDERS FIRST RATE CUT IN TWO YEARS AS INFLATION EASES
By PRESSCODE NEWS
The Central Bank of Nigeria’s Monetary Policy Committee (MPC) begins a crucial two-day meeting today, with growing anticipation that the country could witness its first interest rate cut in two years. The optimism stems from encouraging economic indicators, most notably, a decline in inflation and a firmer naira.
According to the National Bureau of Statistics, headline inflation slowed from 21.88 percent in July to 20.12 percent in August, marking a significant retreat after months of persistent price pressures. The currency has also shown resilience, appreciating in both the official and parallel markets. From trading at an average of ₦1,530 per US dollar earlier this month and peaking at ₦1,541, the naira strengthened to ₦1,520 today, lifting sentiment among consumers and investors alike.
Bismark Rewane, Managing Director of Financial Derivatives Company Limited, expects the MPC to act cautiously, projecting a 25-basis-point reduction in the policy rate to 27.25 per cent. Such a move, he argues, could ease Nigeria’s heavy debt servicing costs without deterring foreign portfolio investors. “It would be a win-win,” he noted.
Analysts appear to share that outlook. Ifeanyi Ubah, Head of Research at Commercio Partners, points to a welcome fall in food inflation, supported by fresh harvest supplies. This, he says, provides the MPC with the confidence to adopt a modest easing stance to stimulate growth. Cordros Securities, however, anticipates a bolder 50-basis-point cut, signalling the possibility of a gradual transition toward monetary relaxation.
Internationally, central banks are shifting in the same direction. The US Federal Reserve recently lowered rates, the Bank of England followed suit, citing weak growth, while the European Central Bank opted to hold steady amid external uncertainties. Against this backdrop, Nigeria’s policymakers may feel increasing pressure to align with the global easing trend, especially as festive season spending draws near.
Nonetheless, regional disparities remain. Food prices continue to bite in parts of northern Nigeria, including Borno and Kano, where inflationary pressures persist. Yet the broader trajectory offers hope of relief for households and small businesses long burdened by high costs.
PRESSCODE NEWS INSIGHT: A rate cut would mark more than a symbolic shift. It could set the tone for a growth-focused policy environment at a time when the nation needs it most. With inflation easing and the naira regaining ground, the MPC has a rare opportunity to balance stability with much-needed stimulus.
As the 302nd MPC meeting unfolds, markets and citizens alike will be watching closely. The committee’s decision could well define Nigeria’s economic narrative as the year draws to a close.
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