Analysts are projecting a drop in the Monetary Policy Rate (MPR) or interest rate by the members of the Monetary Policy Committee (MPC) of Central Bank of Nigeria(CBN) by 50 basis points to 27 per cent from 27.50 per cent
The consensus reflects cautious optimism over moderating inflation and exchange rate stability, tempered by ongoing risks to growth and price pressures in key sectors.
The July 2025 MPC meeting comes at a delicate moment. While headline inflation is slowing and FX volatility has reduced, underlying structural issues—including insecurity, food supply shocks, and weak real sector credit—persist.
A policy hold remains the base-case scenario. However, a marginal rate cut, coupled with corridor adjustments, may be used to subtly recalibrate the CBN’s monetary stance without appearing dovish.
Analysts at Cordros Research in a report said, “ Amid sustained improvements in key indicators, particularly inflation and the exchange rate, we anticipate that the MPC will begin reassessing its current policy stance. Inflation is expected to moderate further in H2-25, reinforcing the case for a pivot toward monetary easing.
“This view is bolstered by recent declines in short-term debt market rates: the discount rate on the 364-day T-bill dropped by 254bps to 16.30per cent, while the 363-day OMO stop rate fell by 265bps to 21.99per cent at the July nine auctions.
“We interpret these shifts as early signals of a gradual move toward policy accommodation aimed at lowering borrowing costs for both the government and corporates.
“That said, we expect the MPC to tread cautiously, balancing growth support with its mandate to preserve price and exchange rate stability.
“While some policy easing is likely, the Committee is expected to ensure that interest rate levels remain sufficiently attractive to sustain capital inflows and anchor inflation expectations amid tight global liquidity and persistent uncertainty.
“As such, we expect the MPC to reduce the MPR by 50bps to 27per cent at its meeting next week. In a bid to steadily ease monetary conditions, the MPC may also lower the Cash Reserve Ratio (CRR) for Deposit Money Banks and Merchant Banks by 500basis points to 45per cent and 200bps to 14per cent, respectively, while retaining other parameters, including the asymmetric corridor at around the MPR at +500/-100basis points and Liquidity Ratio at 30per cent.”
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