Investors Anticipate Deeper Rate Cuts as Nigeria’s Inflation Continues to Ease
Story: written by Uzuh Rita October 16,2025
With Nigeria’s inflation rate slowing for the sixth consecutive month, financial markets are increasingly optimistic that the Central Bank of Nigeria (CBN) may consider a more aggressive rate cut in its next monetary policy meeting.
Analysts believe the sustained decline in inflation — which dropped from 20.12% in August to 18.02% in September 2025 — has strengthened the case for easing monetary policy to stimulate growth and investment.
Market observers say a lower benchmark interest rate could reduce borrowing costs, encourage business expansion, and boost consumer spending. However, they caution that the CBN must balance growth concerns with the need to prevent inflation from rebounding.
“This trend gives the CBN some room to relax its tight stance,” said a Lagos-based economist. “But the decision will depend on how the naira and foreign reserves perform in the coming weeks.”
The positive inflation data follows months of economic reforms under President Bola Tinubu’s administration, which include fiscal discipline, foreign exchange unification, and renewed support for agriculture and manufacturing.
Global institutions like the International Monetary Fund (IMF) have also expressed confidence in Nigeria’s outlook, revising the country’s 2025 growth forecast upward from 3.4% to 3.9%.
Investors are now watching closely to see if the apex bank will take advantage of the cooling inflation to lower rates — a move that could further signal confidence in Nigeria’s recovery path.
