The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) commenced its first meeting of 2026 on February 23, 2026, in Abuja, with market analysts widely anticipating the start of a measured shift toward monetary easing after months of holding the benchmark rate steady.
The two-day session comes amid encouraging macroeconomic signals, including sustained disinflation, greater exchange rate stability, and moderating food costs. January 2026 headline inflation eased to 15.10% year-on-year, down from 15.15% in December 2025—the tenth consecutive monthly decline—and marking a sharp improvement from the 27.61% recorded in January 2025. Core inflation and food inflation have also shown moderation, contributing to renewed optimism that price pressures are easing.
The naira’s performance has bolstered the case for adjustment, with the currency appreciating roughly 8% against the US dollar so far this year, supported by improved foreign exchange liquidity and inflows.
Analysts are divided on the extent of any policy shift but generally agree that conditions now justify some relaxation of the restrictive stance maintained since late 2025. Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co., expects a modest cut, likely 50 to 100 basis points, while emphasising caution to avoid reigniting inflation. He highlighted the influence of rising government capital spending and pre-election fiscal dynamics, which could inject significant liquidity into the system.
Lukman Otunuga, Senior Market Analyst at FXTM, described easing as increasingly justified, pointing to the unexpected slowdown in January inflation and the naira’s gains as key enablers. He framed the debate as not whether to cut, but by how much, following the MPC’s decision to retain the Monetary Policy Rate (MPR) at 27% in November 2025.
Meristem analysts echoed this view, describing the current environment as an inflection point. They anticipate a 100 basis point reduction in the MPR to 26%, alongside a minor tweak to the asymmetric corridor, while keeping the Liquidity Ratio unchanged. They noted that global central banks’ wait-and-see approaches reinforce the need for measured moves, even as domestic indicators improve.
The MPC’s last adjustment occurred in September 2025, when it lowered the MPR by 50 basis points from 27.5% to 27%, accompanied by a narrowing of the asymmetric corridor. Subsequent meetings in November 2025 held rates steady to allow prior decisions to fully transmit and consolidate gains in price and exchange rate stability.
Market observers will closely watch the outcome, expected on February 24, 2026, for indications of the CBN’s confidence in the disinflation trajectory. Any easing would aim to support economic activity and credit growth without compromising hard-won macroeconomic stability, particularly amid potential liquidity pressures from fiscal expansion and political activities. The decision will influence borrowing costs, investment flows, and broader market sentiment in the coming months.
