With the Central Bank of Nigeria’s Monetary Policy Committee (MPC) meeting set for July 22, 2025, analysts are broadly projecting a hold on the Monetary Policy Rate (MPR), currently at 27.5%.
This consensus reflects a mix of cautious optimism about moderating inflation and exchange rate stability, balanced against persistent risks to economic growth and inflationary pressure in key sectors.
Most experts anticipate the MPC will leave all monetary parameters unchanged—MPR at 27.5%, Cash Reserve Ratio (CRR) at 50%, and Liquidity Ratio (LR) at 30%—arguing that this would help consolidate gains from previous hikes while preserving investor confidence.
However, a minority of analysts suggest a possible marginal rate cut to 27.25%, alongside a tweak to the asymmetric corridor, as a signal of fine-tuning amid evolving macroeconomic trends.
What Experts Are Saying
Samuel Adonduwa Onche, a senior banker, expects the CBN to maintain its tight monetary stance to curb inflation and suppress excess demand.
“I do not expect the government to loosen monetary policy at this time. The CBN is expected to hold a high MPR to suppress demand and slow price growth,” he said.
Onche cites the government’s end-of-year inflation target of 15% as a critical anchor. While a minor reduction to 27.25% may be considered, he believes it would likely be accompanied by an adjusted asymmetric corridor of +500/-100bps. CRR and LR are expected to remain unchanged.
Olatunde Amolegbe of Arthur Steven Asset Management also expects a hold, highlighting the trade-offs before the committee.
“We are seeing a resurgence in food inflation due to seasonal effects, insecurity, and increased energy costs tied to the Israel-Iran crisis,” he noted.
“But the relatively stable FX exchange rate should be a major consideration.”
He predicts the MPC will either maintain the MPR or keep all parameters steady.
Idris Adeniyi, Head of Investment at Norrenberger Pensions, believes maintaining current rates is the most prudent path.
“The MPC will likely be cautious and watch inflation and FX trends closely before considering a cut,” he said, adding that attractive real yields continue to draw foreign portfolio investors.
Olaitan Sunday of Rostrum Investment & Securities Ltd sees room for some monetary easing, albeit limited.
“Although inflation remains elevated, it is beginning to slow, suggesting that earlier rate hikes are starting to take effect,” he said.
He noted improvements in exchange rate stability—especially the naira trading around N1,524/$—and stronger FX reserves as reasons to avoid further hikes that could stifle recovery in the real sector.
“High interest rates are already weighing heavily on manufacturing and other productive sectors. Further hikes could do more harm than good at this point,” he warned.
Nairametrics Outlook
The July 2025 MPC meeting comes at a pivotal time. While headline inflation is showing signs of slowing and FX volatility has eased, deeper structural issues—such as insecurity, food supply shocks, and weak credit flow to the real sector—remain unresolved.
A policy hold appears to be the most likely scenario. However, a modest rate cut, accompanied by an asymmetric corridor adjustment, may offer a way for the CBN to subtly recalibrate its monetary stance without sending a dovish signal.
Unless stronger disinflationary trends and improved credit transmission are observed, the MPC is expected to prioritize macroeconomic stability over short-term growth incentives.
