The Central Bank of Nigeria (CBN) is expected to retain the benchmark interest rate unchanged as steady macroeconomic fundamentals provide considerable cushions for external and domestic price pressure.

Most analysts agreed that the apex bank would at the close of its two-day meeting today leave the interest rate benchmark at 26.50 per cent.

The Monetary Policy Committee (MPC), the highest policy-making organ of the apex bank, began a crucial two-day meeting yesterday with decision on the basic interest rate as the main agenda.

The MPC, headed by CBN Governor Yemi Cardoso, traditionally provides monetary policies and benchmarks, which determine the direction of the financial services sector, and the economy to a large extent.

Economic intelligence reports and think tanks, which had previously correctly tracked the apex bank’s position, were mostly in support of a hold on the Monetary Policy Rate (MPR) at 26.50 per cent, citing rising external reserves, stability in the foreign exchange (forex) market and overall economic growth.

Some analysts noted that while inflation risks remain considerable, the overall balance of macroeconomic fundamentals outweighs potential risks.

Inflation rate had moderated slightly from 15.93 per cent in May to 15.91 per cent last month.

Analysts at Cordros Capital said the inflation rate still remains within CBN’s 14.5 per cent to 18.5 per cent tolerance band, thus supporting possible MPC’s decision to maintain the status quo while monitoring any emerging price and currency pressures.

They said: “We believe the mix of developments since May – inflation tilting higher, a relatively stable naira, robust external reserves and resilient economic growth – points overwhelmingly to the MPC maintaining the status quo. Globally, major central banks have shifted towards a wait-and-see stance, providing little impetus for a change in direction.

“Domestically, inflation remains elevated but contained, growth is robust, external reserves are at a high level, and the naira has been relatively stable. All in, we expect a hold decision from the MPC at the meeting, maintaining the monetary policy rate at 26.50 per cent while keeping other parameters constant.”

Managing Director at Arthur Steven Asset Management, Mr. Olatunde Amolegbe, ruled out the possibility of a cut in interest rate, citing the persistent price pressure.

Arthur Steven Asset Management said the CBN is expected to maintain a cautious, data-dependent approach at the meeting.

“While the recent moderation in core inflation is encouraging, policymakers will likely require clearer evidence of a sustained decline in both headline and food inflation before considering any further monetary policy easing,” Arthur Steven stated.

Amolegbe said direction of CBN on interest rate would influence the stock market performance in the second half of 2026.

Chief Executive Officer (CEO), Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the inflationary pressure, though considerable, is not enough to warrant a further hike in interest rate, urging the apex bank to maintain the status quo.

Nigeria’s real gross domestic product (GDP) had grown by 3.89 percent in first quarter 2026, considerably higher than 3.13 per cent recorded in comparable period of 2025. Most analysts expected the economy to record faster growth in the second quarter, with Cordros Capital estimating potential economic growth at 4.20 per cent.

The naira has also remained stable on the back of sustained increase in forex reserves.

At about N1, 382.18 to the dollar, the local currency remains on the upside, with a year-to-date gain of some 300 basis points.

Forex reserves had reached 17-year high at $51.89 billion, representing 13.9 per cent growth so far this year. (The Nation)

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