Market News
Nigeria central bank cuts key rate for first time since 2020 - REUTERS
BY Chijioke Ohuocha and Elisha Bala-Gbogbo
Key Points
- Policy rate lowered by 50 bps
- Forecast was for 75 bps reduction
- Inflation has fallen for five months
- Bank sees inflation falling for rest of 2025
ABUJA, Sept 23 (Reuters) – Nigeria’s central bank cut its key lending rate for the first time since 2020 on Tuesday, lowering it by 50 basis points (bps) as inflation has been easing from very high levels.
The move takes the Central Bank of Nigeria’s Monetary Policy Rate to 27%.
Economists polled by Reuters had predicted a 75 bps cut, following three “hold” decisions so far this year and six hikes in 2024.
The rate cut was predicated on projections for declining inflation for the rest of the year and the need to support the economy, central bank governor Olayemi Cardoso said.
Headline inflation slowed to 20.12% year on year in August, its fifth consecutive drop.
Inflation in Africa’s most populous country scaled repeated 28-year peaks last year, spurred by President Bola Tinubu’s moves to devalue the naira and cut subsidies since taking office in 2023.
But it has been on a downtrend trajectory this year after the statistics office revised its base year and adjusted the weight of items in its price index.
