…The benchmark rate has been held at the current 27.5% since November 26th, 2024, during the CBN’s 298th meeting, unchanged for a little over 8 months.
By Charles IKE-OKOH
FRI JULY 18 2025-theGBJournal| The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) is expected to marginally cut Monetary Policy Rate (MPR) at its next meeting on July 21st and 22nd.
That is according to analysts at Cordros Research (forecast; 50bps reduction), which has in the past successfully projected MPC stance on interest rate.
The benchmark rate has been held at the current 27.5% since November 26th, 2024, during the CBN’s 298th meeting, unchanged for a little over 8 months.
Up until now, the MPC has held off on reassessing the rate, citing the need to monitor the naira performance and anchor inflation expectations, amid the increased global uncertainty.
Keeping the rate unchanged at the next meeting would signal caution from the MPC as it continues to monitor these two key indicators, well as domestic and global uncertainties.
Meanwhile, recent CBN’s commentary has reinforced cautious approach, with the Governor Yemi Cardoso signaling little urgency to adjust, consistently suggesting the apex bank’s policy intervention prevented inflation from reaching unbearable high.
While consumer sentiment has improved somewhat, production cost input is going up, which in itself has deep implication for inflation.
And as seen in recent purchasing managers index (PMI) reports, the naira remains volatile.
Indeed, the CBN July PMI report did flag the unstainable cost absorption by firms and renewed inflation risks, warning that the cost absorption by firms is likely to be unsustainable in the long term and may foreshadow future consumer price inflation.
This will be in consideration when the MPC share their decision next week.
However, with key macroeconomic indicators pointing to a more stable outlook, the Committee could initiate a gradual shift towards monetary policy easing.
But one thing to watch will be whether the decision is unanimous, or if there are dissent from voting members.
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