Nigeria’s financial markets are bracing for what could be the first policy easing of the year, as traders and issuers bet the Central Bank of Nigeria (CBN) may lower its key interest rate in September.
After holding the Monetary Policy Rate (MPR) steady at 27.5% in July, the CBN’s minutes showed a more cautious tone, but analysts at several investment firms say a cut is now “increasingly likely.” Rising market speculation has already caused several corporates to delay planned bond issuances, preferring to wait for potentially lower borrowing costs.
“Businesses are reluctant to lock in at today’s high yields when there’s a strong chance of cheaper financing around the corner,” said a Lagos-based investment banker, speaking on condition of anonymity.
While headline inflation remains above target, analysts argue that a combination of stabilising FX reserves, a firmer naira, and easing food-price pressures give the CBN space to consider a rate cut.
Market watchers say a 25–50 basis point reduction is the most probable outcome if September’s inflation report shows continued moderation.
The implications could be far-reaching: Banks would see cheaper funding costs but slimmer margins.
Corporates could access bond markets more affordably.
Households might benefit from lower lending rates, though gains could be slow to filter through.
“The real test is whether easing policy now can support growth without reigniting inflation,” said economist Tola Oni, noting that Nigeria’s GDP expansion has been uneven in 2025.Outlook: All eyes are now on the August inflation data, due in early September. If the CBN does cut rates, it would mark the first signal of a looser monetary stance under Governor Olayemi Cardoso since his hawkish tightening cycle began late last year.
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