Nigeria MPC Expected to Weigh First Rate Cut in Two Years Amid Slowing Inflation

As the Central Bank of Nigeria's Monetary Policy Committee (MPC) meets amid a persistent disinflation trend, analysts remain divided on the appropriate policy stance. Inflation has steadily declined, reaching 20.12% in August 2025, fueling expectations for a potential rate cut after the benchmark rate held at 27.50% for several meetings. Some economists and institutions, such as Afrinvest West Africa and CSL Brokers, advocate for a cautious reduction of 50 to 100 basis points, citing improved macroeconomic indicators including a stable naira, rising PMI, and robust external reserves. Conversely, others like Agusto & Co. advise caution, warning that economic stability remains fragile and that premature easing could signal an unwarranted shift towards expansionary policy. The debate reflects a broader balance between fostering growth and maintaining price and exchange rate stability, with some forecasting a gradual easing cycle extending into 2026 and beyond. Meanwhile, in the U.S., the Federal Reserve's recent quarter-point rate cut has sparked market uncertainty, with Treasury yields rising unexpectedly and investors awaiting inflation data to assess the timing and appropriateness of the easing move.