CBN, BOJ Expected to Maintain Interest Rates Amid Inflation, Economic Risks

Central banks in Nigeria, Japan, and India are displaying cautious approaches to monetary policy amid mixed economic signals in 2025. Nigeria's Central Bank Governor Olayemi Cardoso has emphasized maintaining high interest rates to combat persistent inflation, with analysts largely expecting rates to remain steady at 27.5% in the upcoming September meeting to protect recent economic stability gains. Similarly, the Bank of Japan is anticipated to hold its benchmark interest rate at 0.5% due to trade uncertainties, weak consumer spending, and export challenges, with a possible rate hike projected for early next year pending economic improvement. In India, inflation has edged up but remains within manageable levels, leading economists and portfolio managers to predict a pause in rate changes, though potential cuts could be considered later in 2025 if growth risks materialize. Across these economies, central banks are balancing the need to control inflation with concerns about slowing growth, reflecting a global trend of cautious monetary policy adjustments amid uncertain economic conditions. The Bank of Japan's cautious stance also includes monitoring the impact of US tariffs and political uncertainties on its export-driven economy.