By FATIHAT OLUSOGA

Copyright independent

LAGOS – The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) at its September 22nd and 23rd, may lower the MPR gradually by 50bps, analysts have said

They cautioned that while inflation has continued to moderate, and the naira has remained relatively stable, the MPC may revisit its current policy stance by gradual transition toward monetary easing.

Analysts from Cordros Securities argued that with key macroeconomic indicators suggesting improved stability, the Committee could begin a gradual transition toward monetary easing.

“We project a 50bps cut in the Monetary Policy Rate (MPR), signalling a measured effort to foster economic growth while maintaining its commitment to price and exchange rate stability.

The Cordros Researchers, while taking commenting on the sustained improvements in key indicators, said: “We expect the MPC to begin reassessing its current policy stance, supported by sustained improvements in key indicators (inflation and the exchange rate) and a more positive outlook.

“The Committee is also likely to consider recent shifts globally to monetary easing, following the US Fed’s rate cut and the prospect of further policy accommodation in near future periods.

“This should be positive for capital flows into emerging and frontier markets, including Nigeria, adding an additional layer of support to engender continued exchange rate stability.

“That said, we expect the Committee to remain cautious, balancing growth-supportive measures with its core mandate of maintaining price stability. Specifically, we believe any easing will be carefully calibrated in an effort to ensure that interest rates remain competitive enough to continue to attract capital inflows and anchor inflation expectations.

“Accordingly, we project a 50bps cut in the Monetary Policy Rate (MPR) to 27.00% at next week’s meeting, while maintaining other parameters”.

On balancing growth-supportive measures with its core mandate of maintaining price stability, the analysts said: “We project that Nigeria’s economy expanded by 3.90% y/y in Q2-25 (Q1-25: +3.13% y/y; Q2-24: +3.48% y/y), supported by solid performances across both the oil and non-oil sectors. The oil sector is estimated to have recorded 11.90% y/y growth, reflecting higher crude output (Q2-25: 1.68mbpd vs. Q2-24: 1.47mbpd), underpinned by increased investment, enhanced pipeline surveillance, and fewer terminal shut-ins.

Meanwhile, the non-oil sector likely grew by 3.62% y/y (Q1-25: +3.19% y/y), driven largely by a rebound in agriculture (+2.63% y/y vs. Q1-25: +0.07% y/y).