CBN Maintains Interest Rate at 27.5% Amid Inflation Changes

The Central Bank of Nigeria (CBN) is expected to maintain its interest rate at 27.5% as it pauses its aggressive tightening cycle, following a significant decline in inflation from 34.8% in December to 24.5% in January due to a revision in data calculation methods. Analysts predict that while the CBN may keep rates steady for now, potential rate cuts could be considered as early as the third quarter of 2025, depending on inflation trends that some experts describe as a structural adjustment rather than a fundamental shift. Since Governor Olayemi Cardoso took office in September 2023, the CBN has raised rates by a total of 16 percentage points to stabilize the naira, which has depreciated significantly against the US dollar. The recent policy actions have helped maintain the naira’s value within a narrow range, although uncertainties remain regarding the sustainability of this trend. Investors and policymakers are closely watching the CBN's decision for indications about Nigeria's economic health and future monetary policy direction. The decision is set for announcement on Thursday, and it reflects a cautious approach in response to evolving inflation metrics.