For the first time in nearly half a year, Nigeria’s central bank might actually make it cheaper to borrow money. As the Monetary Policy Committee (MPC) gathers in Abuja beginning on Monday, analysts are split between a modest easing and a hold.
Most market participants expect a rate cut of between 50 and 100 basis points, citing slowing inflation, stable exchange rates and improving economic indicators, according to a poll by BusinessDay.
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Charlie Robertson, author of The Time Travelling Economist, said there is a strong argument for deeper easing. “There’s a good case for Nigeria’s MPC to cut the policy rate by 200–250 basis points, which would still leave it nearly 10 percent above the 15 percent January inflation rate,” he said.
Nigeria’s headline inflation rate eased to 15.10 percent in January 2026, down slightly from 15.15 percent in December 2025, according to the latest Consumer Price Index report released by the National Bureau of Statistics. The moderation has strengthened expectations that the CBN may begin a gradual easing cycle after months of aggressive tightening.
Razia Khan, managing director and chief economist for Africa and the Middle East at Standard Chartered Bank, expects a more measured move. “We expect a cut of at least 100 basis points following the favourable January CPI print,” she said.
Not all analysts share the easing view. At FSDH Merchant Bank, economists expect the MPC to retain the MPR at 27 percent. According to the bank, a hold would likely keep Treasury bills and short-tenor bond yields lower, supported by abundant liquidity, while leaving long-dated bond yields biased flat to slightly higher due to continued government borrowing. It added that a pause could help anchor FX stability as the CBN maintains tight liquidity management and generate a neutral-to-positive impulse for equities as real yields improve.
Similarly, analysts at Quest Merchant Bank argue that although the MPC adopted a less aggressive stance in 2025 and is expected to pivot toward easing this year, elevated fiscal deficits, exchange rate considerations and lingering inflationary risks warrant caution.
A recent Bloomberg report noted that the moderation in inflation gives policymakers additional scope to cut rates at their first meeting of the year after leaving the benchmark at 27 percent in November. The case for easing is supported by an almost 7 percent appreciation in the naira since the start of the year and external reserves that remain robust at around $48.5 billion.
Ayokunle Olubunmi, head of Financial Institutions Ratings at Agusto & Co., expects a 50 basis points cut in the MPR and a 100 basis points reduction in the Cash Reserve Requirement (CRR).
Ayodeji Ebo, managing director and chief business officer at Optimus by Afrinvest, said the recent moderation in inflation and forward guidance pointing toward gradual easing increases the likelihood of action. “The MPC may consider a 50 to 100 basis points rate cut at its next meeting. Such a move would signal a shift towards a lower interest rate environment aimed at supporting economic activity while maintaining price stability,” he said.
Olufunmilola Adebowale, head of research at Parthian Capital, projected a slightly larger adjustment. “The steep moderation across headline, food and core metrics in January strengthens the case for a policy rate cut,” she said. “We project a 100 to 200 basis points reduction in the benchmark rate, reflecting improved inflation dynamics and the need to support economic growth.”
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Analysts at the Financial Markets Dealers Association expect the MPC to hold rates steady but rely more on liquidity management tools rather than headline rate adjustments. According to them, the committee may tweak the asymmetric corridor around the MPR to allow lower interbank rates, improve liquidity transmission and ease funding conditions for the private sector without weakening its anti-inflation stance.
At its last meeting in November, the committee voted to retain the MPR at 27.0 percent, adjusted the Standing Facility corridor to +50/-450 basis points around the benchmark, maintained the CRR at 45 percent for Deposit Money Banks, 16 percent for Merchant Banks and 75 percent for non-TSA public sector deposits, and left the Liquidity Ratio unchanged at 30 percent.
The decision, the committee said at the time, was aimed at consolidating progress toward low and stable inflation, reaffirming its commitment to data-driven policy decisions. With inflation now easing and macro conditions improving, markets will be watching closely to see whether the MPC signals the start of a new easing cycle or opts for continued caution.
