CBN Hints at 2026 Rate Cuts as Inflation Eases
Atume Terfa
The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has opened the door to possible interest rate reductions next year, pointing to improving inflation trends and a stabilising foreign-exchange market.
Speaking at a bankers’ dinner in Lagos, he said that once inflation shows consistent moderation and foreign exchange liquidity remains strong, the central bank will “calibrate the policy rates in line with evolving data.”
Just months ago, in September 2025, the CBN trimmed its benchmark Monetary Policy Rate (MPR) from 27.5% to 27% — the first cut in five years. But at its most recent meeting, the bank held the rate steady, citing the need to allow prior easing to take effect and to ensure inflation continues to trend downward.
Cardoso’s remarks underscore confidence that a combination of stronger domestic production, improved FX flows, and disciplined liquidity management could soon create room for deeper rate cuts. Such a move would ease borrowing costs, encourage investment, and unlock growth for businesses and consumers long weighed down by high interest rates and inflationary pressure.
Still, he stressed that any further monetary easing will be strictly data-driven; future cuts hinge on sustained economic stability and clear downward pressure on inflation.
