As the 304th meeting of the Central Bank of Nigeria, CBN, Monetary Policy Committee gets underway, attention is firmly fixed on whether policymakers will begin to ease interest rates or maintain their tight stance.
Analysts remain divided, with some projecting a cautious rate cut, while others expect the bank to hold its ground.
The decision comes at a time when headline inflation has eased for months, falling to 15.10%, marking a 10th consecutive monthly decline and a sharp drop from 34.8% recorded in December 2024.
Food inflation has moderated significantly to 8.89%, while core inflation has also slowed to 17.72%.
External indicators are also showing improvement. Nigeria’s foreign reserves have climbed to $49 billion as of February 2026, a 13-year high, driven by stronger oil receipts, diaspora remittances, and ongoing central bank reforms.
The naira has also posted relative stability and appreciation, with the official rate trading between ₦1,339 and ₦1,346 to the dollar, while the parallel market has narrowed to a band of ₦1,350 to ₦1,370.
At its last meeting in 2025, the CBN held the policy rate at 27,% despite expectations of a cut. At the time, headline inflation had already fallen to 16.05% in October from 18.02% in September, while reserves rose to 46.7 billion dollars, a seven-year high.
CBN Governor, Olayemi Cardoso defended the hold decision, saying it reflected the bank’s commitment to consolidating gains in price stability and exchange rate management.
Now, with inflation cooling further, reserves stronger, and the exchange rate more stable, some analysts believe the 304th MPC meeting could signal the start of a policy shift.
A rate cut, they argue, would lower borrowing costs, stimulate consumer spending, and encourage corporate investment.
For the real sector, cheaper credit could boost demand for housing and automobiles, support business expansion, and help reduce unemployment.
However, others warn that policymakers may still prefer a gradual and calibrated approach, seeking to avoid a resurgence of inflationary pressures if demand outpaces supply.
Ultimately, beyond the rate decision itself, the tone and forward guidance from the committee may prove just as critical. Markets, investors, and businesses will be looking for clear signals on the direction of Nigeria’s monetary policy and whether the Central Bank believes the economy is strong enough to enter a new phase of monetary easing.
For now, the country waits for the outcome of the 304th MPC meeting, with the decision expected to be announced on Tuesday. Until then, all eyes remain on the apex bank.
(Editor: Terverr Tyav)
