As the Monetary Policy Committee (MPC) of the Central Bank of Nigeria convenes on Monday and Tuesday September 21 and 22, 2026, analysts say they believe the members will continue to hold the benchmark interest rate unchanged even as they expect tweaks that would signal the willingness of monetary policy to ease.
The committee had continued to leave the benchmark interest rate unchanged after its decision to ease by 50 basis points in February this year, leaving the benchmark interest rate at 26.5 per cent. Chief Executive, Economic Associates, Dr Ayo Teriba, said the recent moderation in inflation was not strong enough to justify a reduction in the Monetary Policy Rate (MPR), arguing that the MPC would need to observe the trend for longer before making a major policy move.
“Inflation had eased marginally for only three months, so ideally, they should still hold. They should still wait and observe further,” Teriba said. He said the latest inflation figures did not yet establish a strong disinflationary trend, noting that the movement from 15.93 per cent to 15.43 per cent and subsequently 15.39 per cent showed only marginal improvement.
According to him, the MPC would have little justification for easing based solely on the recent inflation numbers, describing the moderation as weak. “Nobody will ease because of that. Anybody that does that because of that doesn’t know what they’re doing. Inflation is easing, weakly,” Teriba said.
He, however, pointed to the relative stability of the naira as a factor that could support further moderation in inflation, saying sustained exchange rate stability should reduce the risk of renewed price pressures.
“Despite that, because the exchange rate remains stable and is gaining. As long as the exchange rate is stable, you don’t expect acceleration of inflation. You actually expect deceleration, or even a deflation,” he said.
Teriba also cautioned against a rate cut ahead of the 2027 general elections, arguing that the timing would make a major easing decision difficult. “If based on judgment about inflation alone, then who wants to ease in September, four months before election campaign? Campaign started in August,” he said.
“So, no central bank is going to ease four months to election. Otherwise, they don’t know what they are doing. They have a lot of reasons not to ease, and if they must ease, they must come out with some extraordinary justification.”
He added that the apex bank could prefer to defer any significant changes until after the election period. “They may want to wait until after election before they do anything drastic to those variables. So, I am on their side for waiting and seeing,” Teriba said.
Noting that major central banks are adopting a more hawkish stance, analysts at Cordros Capital said “we believe developments since the July meeting strongly favour the MPC maintaining its current policy stance. Globally, major central banks are adopting a more hawkish stance, providing no external impetus for the CBN to ease policy.
Domestically, the resumption of disinflation, robust growth, improved external buffers, and relative exchange rate stability provide immediate justification for easing. At the same time, elevated liquidity in the financial system remains a consideration for the MPC.
“Taken together, these global and domestic dynamics lead us to suggest that the MPC will maintain the MPR at 26.5 per cent at the meeting, resulting in a hold decision. We also expect the Committee to adjust the Standing Facilities Corridor to +50/–500bps around the MPR.”
Meanwhile, analysts at Cowry Research said the inflation outlook could provide room for a more accommodative monetary policy stance, although the research firm cautioned that the MPC would have to weigh the sustainability of the disinflationary trend against persistent supply side risks.
The firm projected headline inflation to moderate further to 15.19 per cent in September 2026, citing improved exchange rate stability, lower energy costs and softer services inflation as factors supporting the decline.
Cowry Research, however, said food inflation remained the major domestic risk to the outlook, with agricultural supply conditions, transportation costs and regional variations in food availability likely to determine the pace of further moderation.
“While broader price pressures are easing, persistent supply-side constraints could limit the speed and durability of the improvement,” the analysts said. The research firm noted that the continued moderation in headline, core and monthly inflation had strengthened the basis for a discussion around monetary easing.
It added that the easing inflation trend could strengthen the case for the MPC to consider a gradual easing cycle, but stressed that the timing and pace would depend on the persistence of disinflation, exchange rate stability, liquidity conditions and the balance of domestic and external risks.
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