The Central Bank of Nigeria (CBN)’s Monetary Policy Committee (MPC) began its two-day meeting today in Abuja. The top agenda is whether to maintain the benchmark interest rate at 27.50%.
This comes as Nigeria experiences a decline in inflation and signs of easing food and core inflation. Many financial experts believe the MPC will likely keep rates steady.
The MPC, led by the CBN Governor, shapes Nigeria’s monetary direction. It influences lending rates, savings yields, and inflation control. Their decision affects businesses and ordinary Nigerians.
Inflation Rates Show Clear Signs of Decline
The National Bureau of Statistics (NBS) reported that Nigeria’s headline inflation rate dropped to 23.71% in April from 24.23% in March. This drop of 52 basis points signals some relief for consumers.
On a monthly basis, inflation also fell to 1.86% in April from 3.90% in March. The prices of major food items also slowed down, which helped ease pressure on household expenses.
Food inflation declined to 21.26% in April from 21.79% in March. Month-on-month food inflation also reduced to 2.06% from 2.18%.
Core inflation, which excludes food and energy, fell sharply. It dropped to 23.39% from 24.43%. On a monthly basis, it fell to 1.34% from 3.73%.
This pattern suggests that price pressures may be cooling off, giving the CBN more room to avoid interest rate hikes.
Experts Expect No Major Policy Changes
Analysts from several financial firms, including Afrinvest, Cordros Capital, and FDC, expect the MPC to maintain its current stance.
A source close to the CBN said, “The MPC will likely remain cautious and keep all parameters steady.”
Cordros Capital added, “Given global economic uncertainty and the naira’s instability, the committee will probably leave the interest rate unchanged.”
They believe holding the rate will help support the naira and keep inflation expectations under control.
Analysts at Futureview, however, suggested the CBN might slightly lower the benchmark interest rate if inflation continues to ease. They also noted that international risks such as U.S. trade restrictions and foreign capital flow uncertainty remain concerns.
Experts warn that the naira is still weakening. This could put upward pressure on inflation again and challenge the CBN’s ability to stabilize the economy.
Commenting on the issue, Ramadan Abubakar NUHU, the Founder of RÂNA Holdings wrote,
“Since the Last Meeting: The New Signals
- Headline inflation declined to 23.71% in April (from 24.23% in March)—the sharpest drop since early 2024
- Core inflation eased to 23.39% (from 24.43%)
- Food inflation, a key MPC trigger, fell to 21.26%—its lowest in nearly a year
- FX reserves climbed by $364 million, marking the first steady rise since January
- The naira trades at ₦1,606.64/$, above the ₦1,500 budget benchmark
- Oil trades at $59/barrel, with production still underperforming at 1.6 million bpd
- Global risks are mounting, as Trump-era tariffs re-enter the global narrative
In any other country, this would call for a cautious recalibration. In Nigeria, it calls for something even harder: coherence.”
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