Nigeria’s Central Bank Poised to Cut Benchmark Rate as Inflation Eases to 16%

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria is poised to extend its easing cycle at its fifth and final meeting of the year, after softer-than-expected inflation.

Nigeria’s headline inflation extended its downtrend for the seventh consecutive month, easing to 16.05% year-on-year (YoY) from 18.02% in September, driven by significant moderation in both the food and core baskets.

“We expect the MPC to consider the ongoing disinflation trend, stable exchange rate, and the recent rise in external reserves to a seven-year high, supporting a continued dovish stance,” analysts at Meristem Securities said.

“These stronger domestic macroeconomic indicators, broad-based economic growth and favorable global environment further reinforce the case for another rate cut.”

A reduction would offer relief to businesses burdened by high borrowing costs and could help spur short-term investment.

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