The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) began its two-day meeting today, with key focus on whether to adjust the benchmark interest rate. The decision is highly anticipated as it will influence the country’s economic direction amid slowing inflation and global financial uncertainty.
Most analysts expect the MPC to maintain the current Monetary Policy Rate (MPR) at 27.50%, choosing to wait for more consistent inflation trends before making any changes. The MPC, led by the CBN Governor, plays a vital role in shaping monetary policy that affects Nigeria’s economy and financial markets.
The latest data from the National Bureau of Statistics (NBS) shows that inflation is beginning to ease. Headline inflation dropped to 23.71% in April 2025, down from 24.23% in March. Monthly inflation also declined from 3.90% in March to 1.86% in April.
Food prices have played a big part in the slowdown. Food inflation fell slightly to 21.26% in April from 21.79% in March, with the monthly rate also easing. Core inflation—which excludes items like food and energy—dropped significantly to 23.39% from 24.43%, and on a monthly basis, fell from 3.73% to 1.34%.
Analysts from firms including Financial Derivatives Company, Cordros Capital, Afrinvest, and Arthur Steven Asset Management believe the central bank will likely keep interest rates steady, taking a cautious stance in light of domestic improvements and global uncertainties.
However, analysts at Futureview suggest there may be a slight rate cut if inflation continues to trend downward. Cordros Capital highlighted that ongoing global trade tensions, particularly from U.S. protectionist policies, are contributing to instability, which could impact the naira.
They added that even with positive real returns, inflation risks are still present, especially with the naira’s gradual depreciation. This may prompt the central bank to hold firm on policy rates to manage inflation expectations and maintain investor confidence.