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The moderation in Nigeria’s headline inflation rate for the fifth consecutive month in August and the strengthening of the naira in recent days, suggest that the chances of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) cutting its benchmark policy rate-the Monetary Policy Rate (MPR) at the end of its two-day meeting tomorrow, are quite high, analysts have said.

Findings by New Telegraph show that analysts believe that the deceleration in inflation, naira stability, as well as global monetary trends may push the MPC into lowering the MPR by 25 – 50 basis points. If the analysts’ forecasts prove accurate and the apex bank reduces the MPR, which it has held steady at 27.5 percent since November last year to curb inflation, it would be the first time the regulator would be cutting interest rates in five years.

Commenting on the August 2025 CPI report released by the National Bureau of Statistics (NBS), last week, for instance, analysts at Comercio Partners said they expect the MPC to implement a 25-basispoint rate cut on Tuesday.

They stated: “We anticipate the Committee will implement a 25-basis-point rate cut for the first time this year, in a bid to stimulate economic activity and strengthen domestic demand. This projection is supported by declining inflation and continued exchange rate stability.

In the first half of September, the naira recorded a notable appreciation in value, while food inflation, one of the MPC’s key concerns, eased in August 2025. “Given Nigeria’s current high-interest rate environment, a rate cut has become increasingly important to encourage investment and support business activity across the economy.”

The analysts further said: “The August inflation data points to continued easing price pressures, with inflation falling year on year and Month on month, except core inflation, which rose by 0.46% month on month. “This slight uptick in core reflects price stickiness in non-volatile items such as housing, utilities, and transport, which tend to be more permanent in nature.

Nonetheless, the broader disinflationary trend, supported by stable exchange rates and the onset of the harvest season, signals improving stability in the economy. With food and headline inflation continuing to moderate, the MPC is likely to view this as sufficient room to begin cautious easing. Overall, the outlook remains positive, with shortterm pressures outweighed by sustained gains in price stability.”

Indeed, even before the NBS released its latest CPI report, some analysts had already started predicting that members of the MPC are likely to vote for a cut in interest rates at the end of their meeting tomorrow.

Specifically, in a report released earlier this month by Stanbic IBTC Bank, the Head of Equity Research West Africa at the financial institution, Mr. Muyiwa Oni, had forecast that with headline inflation rate having moderated further last month to 21.45 per cent y/y – 21.63percent y/y, and likely to settle at 17.19 per cent y/y–17.92 per cent by November, the MPC may be, “incentivized to switch to an accommodative monetary policy by September from the current neutral stance.”

As Oni put it, “we estimate headline inflation to moderate further in August to 21.45 per cent y/y – 21.63 per cent y/y, and possibly settle at 17.19 per cent y/y–17.92 per cent y/y by November. Accordingly, we still expect up to 150 bps cumulative rate cut in 2025.”

Also, in a recent report, analysts at Financial Derivatives Company (FDC) Limited said they expect the MPC to begin easing monetary policy at their meeting this month with a 25bps(basis points) cut. The analysts, who said that there was a 70 per cent probability that the MPC will cut interest rates compared with a 30 per cent chance of the committee maintaining the status quo, predicted that a further 100bps cut is likely in November and that, “easing cycle to extend into 2026 if inflation stays contained.”

However, there are some analysts, who believe that while inflation is likely to maintain a downward trend, it is still too high to make the MPC cut interest rates at this time. Expressing this view in their report, released penultimate week, analysts at Cowry Asset Management Ltd, said: “With headline inflation easing for the fifth consecutive month to 20.12 per cent in August 2025 (from 21.88% in July) and staying broadly in line with forecasts, we expect the disinflationary trend to persist in the near term, albeit at a slower pace.

“The moderation reflects base effects, relative exchange rate stability, and ongoing food supply improvements. However, the uptick in month-on-month inflation signals that underlying price pressures remain, driven largely by elevated energy costs, transport fares, and seasonal food demand. Looking ahead, we anticipate that headline inflation could trend closer to the 19.73 per cent in September 2025, provided exchange rate stability is sustained and harvest season supplies ease food prices.

“The Monetary Policy Committee (MPC) is scheduled to reconvene later this month to reassess its policy stance. With month-on-month inflation readings still elevated, the Committee has, so far in 2025, opted for caution—holding the benchmark rate steady at 27.50 per cent to anchor expectations.

That said, the sharp moderation in headline inflation in August could provide room for a potential policy shift, possibly even a symbolic rate cut to signal confidence in the disinflation trend. “Still, Cowry Research thinks the MPC may tread carefully, given lingering risks from FX pass-through, structural food supply pressures, and the sticky trajectory of core inflation.

In our view, the committee is more likely to strike a balanced tone—acknowledging the easing price pressures while keeping its guard up against residual risks to price stability.” Similarly, commenting on the August CPI report, analysts at Coronation Merchant Bank said that despite the slowdown in inflation they expect the MPC to, “Retain (a) restrictive stance- near-term,” to ensure that the slowdown in inflation recorded in August is “consolidated.”

The analysts stated: “We expect the Monetary Policy Committee (MPC) to maintain its current cautious and restrictive policy stance at their upcoming meeting. We expect that they will want to ensure that the disinflation on the m/m basis seen in August is consolidated and not just a one off before they start easing as the (CBN) Governor has previously warned of the dangers of easing too early which may allow inflation to rebound, negating the hard work and pain put in to combat high inflation over the last couple of years.