Judul : CBN may cut interest rate as inflation slows, GDP gains focus — Analysts
link : CBN may cut interest rate as inflation slows, GDP gains focus — Analysts
CBN may cut interest rate as inflation slows, GDP gains focus — Analysts
As Nigeria’s Central Bank prepares for its third Monetary Policy Committee (MPC) meeting of 2025, expectations are building around a potential 25 basis point interest rate cut. Economic analysts and stakeholders are closely watching inflation trends and GDP growth figures, which are likely to influence the Central Bank of Nigeria’s (CBN) next major monetary decision.
One of the country’s leading economists, Bismarck Rewane, Chief Executive of Financial Derivatives Company, has forecast a likely rate cut. Speaking on Channels Television’s Business Morning program on Thursday, Rewane pointed to a unique combination of rising global inflation and declining local inflation as justification for a moderate easing of rates.
“I think there will be a cut of 25 basis points,” Rewane said. “Why do I say that? Global inflation is on the rise, while Nigeria’s inflation is trending downward. Even using the older methodology, inflation is easing.”
Rewane also highlighted the current exchange rate of the naira, which stood at ₦1,530 per dollar on Thursday, as evidence of relative currency stability—a factor that may support a more accommodative monetary stance.
New data released by the National Bureau of Statistics showed Nigeria’s inflation rate fell for the third consecutive month, reaching 22.22 per cent. Despite this downward trend, analysts remain cautious. Core inflation remains sticky, and price pressures persist in food and energy segments due to security threats in key agricultural zones and weather-related disruptions, such as flooding.
The MPC’s upcoming decision, scheduled for July today and tomorrow, will be pivotal in shaping the country’s economic direction for the second half of the year. Interest rates currently stand at 27.50 percent.
While some analysts saw room for a small rate cut to stimulate the economy, others warned that global uncertainty, weak fiscal support, and local structural challenges could argue for a pause in policy changes.
Supporters of a rate cut argued that it would encourage lending to the real sector, potentially boosting investment, consumption, and job creation. Real interest rates have turned positive, and the bond market is already reflecting expectations of a cut, with yields falling into negative territory in real terms.
“Confidence is improving, and price conditions have stabilized,” said one Lagos-based market analyst. “A modest cut now could support momentum without jeopardizing macroeconomic stability.”
However, others argued caution. With fiscal policy seen as underwhelming in its support for monetary tightening, and with ongoing risks such as insecurity in food-producing states and rising global financial market volatility, a growing number of analysts are betting the CBN will keep rates unchanged.
Analysts at financial intelligence firm Proshare caution that the MPC must carefully weigh whether a rate cut is needed now—and what the opportunity cost might be.
ALSO READ FROM NIGERIAN TRIBUNE: Why I told Obi to seek my consent before visiting Edo — Okpebholo
“The key question for the MPC is whether easing rates now will do more good than harm,” Proshare stated in a note to investors. “With limited fiscal space and elevated downside risks, a premature rate cut could backfire.”
The MPC’s decision will have far-reaching implications for interest rates, borrowing costs, investment sentiment, and overall economic stability. With inflation on a downward path but far from target, and GDP growth still fragile, the committee faces a delicate balancing act.
For now, all eyes remain on the CBN as Nigerians and investors alike await signals that could define the country’s monetary and economic outlook in the months ahead.
Provided by SyndiGate Media Inc. (Syndigate.info).Demikianlah Artikel CBN may cut interest rate as inflation slows, GDP gains focus — Analysts
Anda sekarang membaca artikel CBN may cut interest rate as inflation slows, GDP gains focus — Analysts dengan alamat link https://www.punyakamu.com/2025/07/cbn-may-cut-interest-rate-as-inflation.html
0 Response to "CBN may cut interest rate as inflation slows, GDP gains focus — Analysts"
Post a Comment