The Business NG - September 22, 2025

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Editorial Focus: CBN Faces Delicate Balancing Act at September MPC

The Central Bank of Nigeria’s upcoming Monetary Policy Committee (MPC) meeting on September 22–23, 2025, presents a critical test of its balancing act between growth stimulation and policy credibility. With inflation easing for five straight months—the steepest moderation since April—and the naira holding steady between ₦1,480 and ₦1,600 per dollar, conditions appear favorable for a modest rate cut.

Analysts argue that global tailwinds, including the U.S. Federal Reserve’s recent rate cut, have eased external tightening pressures, giving the CBN more flexibility to recalibrate domestic rates. A 25–50 basis-point reduction in the benchmark Monetary Policy Rate (MPR) would not only signal confidence in Nigeria’s macroeconomic stability but also provide relief to businesses grappling with high borrowing costs.

Yet, caution remains. At 27.50%, the MPR is already at historically tight levels, designed to rein in inflation and support investor sentiment. Cutting too quickly risks undermining the hard-won credibility the CBN has built through aggressive interventions and its push to stabilize the naira.

The debate is therefore finely balanced. Proponents of a rate cut point to improved FX liquidity, stable portfolio inflows, and declining price pressures as reasons to pivot toward growth. Critics warn that premature easing could unsettle markets and weaken policy signals.

As BusinessNG observes, the MPC’s decision will go beyond mere rate adjustment—it will set the tone for investor confidence in Nigeria’s macroeconomic management for the remainder of the year.