Further Interest Rate Cuts Possible if Inflation Continues to Ease -Cardoso
Nigeria’s Central Bank of Nigeria (CBN) may begin reducing interest rates again in 2026 — if recent improvements in inflation and market stability hold, CBN Governor Olayemi Cardoso said.
He told guests at a bankers’ dinner in Lagos: “Our models project continued disinflation in 2026, helped by stronger domestic production, improved foreign‑exchange liquidity, and more disciplined liquidity management.”
He added that once inflation “moderates and becomes firmly anchored,” the bank will “calibrate the policy rates in line with evolving data.”
Only a few days ago, the CBN’s Monetary Policy Committee held the benchmark rate — the Monetary Policy Rate (MPR) — at 27 percent, opting for a “wait‑and‑see” approach instead of an immediate cut.
He noted that headline inflation, which surged above 34 percent in late 2024, had cooled to around 16.05 percent by October 2025 — a sign that monetary tightening, exchange‑rate stability, and improved supply conditions are working to ease price pressures.
The backdrop to this cautious optimism: inflation has now slowed for several consecutive months, and combined with improved foreign‑exchange conditions and better domestic supply, the CBN believes macroeconomic pressures are easing.
Still, Cardoso warned that current double‑digit inflation remains “too high,” underscoring that the CBN’s return to lower rates will depend strictly on consistent data — not on political calendars or external expectations.
Analysts now see early 2026 — and specifically the January inflation data — as critical for whether the easing cycle resumes
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