CBN Likely to Retain Interest Rate at 27.50% as MPC Meeting Begins

Inflation cooled to 23.71 per cent in April 2025, according to the latest report by the National Bureau of Statistics (NBS).

Members of the committee started their meeting in Abuja today, Monday, May 19, 2025, and the outcome will be announced by the Governor of the apex bank, Mr Yemi Cardoso, on Tuesday.

At 23.71 per cent, the inflation levels remain elevated and strains on the Naira have only recently abated after an initial selloff in April caused by a slump in the price of oil, the country’s main export.

The World Bank had recently projected that Nigeria’s inflation may moderate to 22.1 per cent, higher than the 15 per cent targeted by the Bola Tinubu-led administration.

Despite this, market analysts expect that the MPC may choose to hold the rate steady to allow for more slowing of inflation, which was only rebased in January 2025.

Nigeria will likely join Zambia, Angola and Ghana to leave theirs at current levels and may start easing in the second half of the year as disinflation gathers pace. Others key African economies like Egypt, South Africa, and Mozambique, are expected to cut their rates this month.

According to Bloomberg, Nigeria may see “some room for the CBN to cut rates” in the second half of the year as disinflation is expected, citing Mr Gbolahan Taiwo, an analyst at JPMorgan Chase & Co.’s in a client note.

The MPC meeting will be the first rate-setting meeting since the US imposed a 10 per cent universal tariff and slapped China, Africa’s largest trading partner — with a 145 per cent levy before reducing it to 30 per cent for 90 days.

The International Monetary Fund (IMF) in April downgraded its 2025 economic growth forecasts for Nigeria to 3.0 per cent in 2025 amid global uncertainty.

The global lender cited “lower external demand, subdued commodity prices, and tighter financial conditions, with more significant downgrades for commodity exporters and countries with larger trade exposures to the US,” as major threats to Nigeria and other African countries’ growth this year.