The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) is set to make a crucial decision on interest rates amid declining inflation rates and relative stability in the foreign exchange market.
Nigeria’s inflation rate dropped to 22.22% in June, down from 22.97% in the previous month, marking the second consecutive decline.
The MPC will hold its 301st meeting on July 21-22, 2025, in Abuja, where it will decide on the interest rate.
Analysts have expressed different opinions on the likely decision, with some expecting a marginal reduction in interest rates and others predicting no change.
Some analysts, like Bismarck Rewane, advocate for a 25 basis point rate cut to 25%, citing the latest IMF forecast that projects inflation will decline to 18% by 2026.
Others, like Afrinvest Securities, expect the MPC to maintain its current policy stance due to ongoing external risks, food supply shocks, and uncertainties surrounding Nigeria’s rebased GDP figures.
The Economic Indicators shows that naira has strengthened by 7.27% this year, and domestic crude oil production has increased to 1.74 million barrels per day, which could boost the oil sector’s contribution to overall economic output.
Analysts expect future MPC decisions to be shaped by exchange rate dynamics and inflation trends, with a potential gradual approach to balancing exchange rate stability and disinflationary process.
The MPC’s decision will likely have significant implications for the economy, and stakeholders are eagerly awaiting the outcome.
