The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has signalled that policymakers will adopt a cautious approach to any interest rate cuts when the Monetary Policy Committee (MPC) meets next week, despite nearly a year of easing inflationary pressures.
Speaking at the BusinessDay Conference in Lagos, Cardoso said the steady decline in inflation over the past 11 months had strengthened expectations that interest rates could begin to moderate. However, he warned that recent geopolitical developments, particularly the conflict involving Iran, have complicated the inflation outlook and increased uncertainty.
Cardoso defended the CBN’s decision to keep its benchmark interest rate unchanged at its last policy meeting, noting that the bank’s assessment was based on economic indicators not fully reflected in market expectations. He stressed that the MPC would continue to base its decisions on data rather than speculation or investor sentiment.
The CBN governor also credited the Federal Government’s early economic reforms, including foreign exchange market reforms and tighter monetary policies, with improving Nigeria’s resilience to external shocks. He said those measures have helped cushion the economy against global uncertainties despite persistent inflationary risks.
Investors have been watching closely for signs that the central bank is preparing to begin an easing cycle after aggressive rate hikes over the past two years. However, Cardoso’s remarks suggest policymakers are likely to maintain a cautious stance until they are convinced inflation is on a sustained downward path. The MPC is scheduled to meet on July 20 and 21 to review monetary policy.
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