Onome Amuge

The Central Bank of Nigeria’s Monetary Policy Committee (MPC) returns this week for what may be its most consequential meeting of 2025, as economists and investors weigh whether the Committee will extend its September easing cycle or pause to assess the impact of its earlier decisions.

The two-day meeting, scheduled for Monday 24th and Tuesday 25th November, comes at a delicate moment for the economy. Inflation has been edging lower for three consecutive months, the foreign exchange (FX) market is enjoying its longest period of stability since the currency reforms of mid-2023, and external reserves have shown a gentle but persistent upward trajectory. 

Monthly inflationary pressures remain persistent, and anticipated festive-season demand is likely to drive food prices higher. Analysts caution that the CBN must maintain clear messaging to preserve the credibility it has recently regained in price stability. Central to market speculation is whether the MPC will lower the Monetary Policy Rate (MPR) by 25–100 basis points or keep it steady at 27 percent, following September’s first rate cut of the year.

The Committee’s decision in September, a 50 bps reduction from 27.5 per cent, was driven by what it described as “improving macroeconomic fundamentals”, including stronger output growth, a more orderly FX market, improved reserves, and the sharpest disinflation print in five months. That combination, analysts said then, marked the first real window for cautious easing after nearly two years of tightening.

But two months on, the field of opinion has become divided.

While inflation has continued to decelerate, the disinflation trend is still fragile, and pressure from holiday demand, especially in food markets, could disrupt an already uneven trajectory. Economists say this tension explains why the market remains evenly split ahead of the meeting.

Proponents of a rate cut argue that the CBN has achieved enough price stability and exchange rate consolidation to justify further easing, which they say is essential to stimulate credit expansion, revive private investment, and support the fragile recovery in GDP.

Those calling for a hold warn that month-on-month inflation remains elevated, the festive period typically drives food prices higher, and premature monetary easing could reignite FX pressures, especially as global monetary conditions remain tight and foreign investors are still cautiously watching Nigeria’s reform trajectory.

Monday’s meeting will be the 11th MPC meeting under the leadership of Governor Olayemi Cardoso, who was appointed in late 2023. The MPC held six meetings in 2024, hiking rates at all but one, and inflation nonetheless ended that year above 33 percent.

By early 2025, the lagged effects of those hikes, combined with improved FX liquidity and better coordination with fiscal authorities, helped push inflation downward from its early-year highs. September’s meeting was the first sign that the CBN believed inflation had peaked and that the economy could sustain a modest easing cycle.

United Capital: Expect 50–100bps Cut, Lower CRR

United Capital Research is among the more dovish institutions, forecasting a deeper easing move than the market consensus. The firm expects the MPC to cut the MPR by 0.5–1 per cent and also reduce the Cash Reserve Requirement (CRR) for commercial banks from 45 per cent to 40 per cent, which would free liquidity into the banking system.

According to its research note, “Such measures would reflect confidence in the ongoing disinflation trend and the resilience of external buffers, while maintaining policy credibility.”

United Capital expects the Committee to cut the MPR by 0.5–1 per cent, maintain the asymmetric corridor at +2.5 per cent/–2.5 per cent, reduce the CRR for commercial banks to 40% while retaining it at 16% for merchant banks, keep the Liquidity Ratio at 30 per cent, and maintain a 75 per cent CRR on non-TSA public sector deposits.

The firm argues that easing liquidity conditions is essential to revive lending to the real sector, unlock private investment, and accelerate GDP growth.

Comercio Partners: Leaning toward a 100bps cut

Comercio Partners also expects a relatively aggressive cut of 100 bps, citing a clear disinflation trend and sustained FX stability.

“The MPC is scheduled to hold its 303rd meeting on the 24th and 25th of November 2025. Given the significant improvement in inflation and the relative stability of the exchange rate, we anticipate a 100-basis-point rate cut,” the firm said.

Comercio analysts argue that the September cut did not materially weaken the naira, nor did it trigger a resurgence in speculative FX demand; a sign, they say, that the market is increasingly confident in the CBN’s policy direction.

CardinalStone Research: Disinflation continues, festive pressures rising

CardinalStone Research also expects a rate cut, although it acknowledges that festive season demand is likely to push food prices higher in November and December.

“While the month-on-month pressure in October was noticeable, we see latitude for MoM price pressures in November, largely induced by festive demand for food items.
Nonetheless, we believe the MPC might view this as insufficient to alter the current disinflation trend,” the firm said.

CardinalStone expects a rate cut, likely 25–50 bps, as the Committee seeks to balance disinflation support with caution.

Coronation Research: Best to wait, expect a hold at 27%

Coronation Research, however, expects the Committee to hold rates at 27 per cent, arguing that the CBN should not take risks while month-on-month inflation remains sticky and consumer prices are still under pressure from higher energy costs.

“The MPC is likely to await clear evidence of sustained inflation moderation before continuing the policy easing path. Given the current dynamics, we anticipate that the MPC could hold the policy rate at 27%, maintaining a tight stance to anchor inflation expectations and support price stability,” its analysts wrote.
The firm warns that early monetary easing could undermine the credibility the CBN has rebuilt after a period of severe FX volatility.

Meristem Research: Core inflation still under pressure

Meristem Research believes the CBN may place more weight on core inflation, which excludes volatile food and energy,and which has been slower to decelerate.

“Annual core inflation is likely to sustain its downward trend… However, we foresee a likely upturn in monthly core figures as elevated domestic energy prices (fuel and gas) and heightened consumer demand ahead of the festive season exert upward pressure,” it stated.

Meristem expects the MPC to be cautious, but still sees room for a small cut, likely 25 bps,if the Committee prioritises the broader disinflation trend over short-term seasonal pressures.

IMPI: MPC should cut by 100bps to 26 per cent

The Independent Media and Policy Initiative (IMPI) maintains one of the most aggressive easing expectations of all institutions.

“In Policy Statement 029 issued before the September meeting, we projected that the MPC would reduce the MPR by 150 basis points to 26% by year end. With the first 50 bps implemented in September, we reaffirm our expectation of a further 100 bps cut to 26% this month,”said Chairman Omoniyi Akinsiju.

IMPI argues that the softer inflation outlook provides the MPC with enough justification to accelerate monetary easing.

Key considerations for the Committee

Headline inflation has slowed for three straight months, but month-on-month pressures remain elevated, with food prices posing the biggest risk as festive-season demand builds. FX conditions have stabilised for more than eight weeks on the back of stronger remittances, disciplined demand, and improved oil receipts, while external reserves have edged higher, though the MPC remains mindful that a rate cut could trigger renewed FX pressure from corporates. Credit to the private sector is still constrained by high CRR levels and elevated lending rates, prompting analysts to warn that growth will remain weak without liquidity easing. 

Globally, major central banks, including the US Federal Reserve and the ECB, continue to adopt cautious stances on inflation, limiting Nigeria’s room to diverge. After two years of FX volatility, the CBN is also focused on protecting the credibility of its recent reforms, aware that any hint of policy complacency could undermine the progress made.

What markets will be watching

Regardless of whether the MPC cuts or holds, markets will focus most on the Committee’s forward guidance; specifically its views on the durability of disinflation, the sustainability of FX stability, the trajectory of credit conditions, the timing and scale of future policy easing, and the risks to food prices and supply chains in Q1 2026. Investors are also keen to know whether the MPC will consider a phased reduction in the CRR, which banks say remains one of the biggest constraints on credit expansion.