Analysts predict rates will hold firm at 26.5% as MPC meets today

The Central Bank of Nigeria (CBN) has scheduled the 306th meeting of its Monetary Policy Committee (MPC) for Monday, July 20 and Tuesday, July 21, 2026, amid widespread expectations that policymakers will keep the benchmark Monetary Policy Rate unchanged at 26.5 percent. The two-day meeting comes as the apex bank weighs the need to sustain price and exchange rate stability despite a slight moderation in headline inflation in June.

According to a notice issued by the CBN, the meeting will commence at 10:00 a.m. on Monday and reconvene at 8:00 a.m. on Tuesday. The sessions will be held in the MPC Meeting Room on the 11th Floor of the CBN Head Office in Abuja, after which the Committee is expected to announce its decision on the Monetary Policy Rate and other key monetary policy parameters.

Analysts speak

Razia Khan, managing director and Chief Economist, Africa and Middle East Global Research, Standard Chartered Bank

Headline inflation was 15.9 percent year-on-year in June, broadly unchanged from May, although food inflation accelerated. The escalation of the Middle East conflict and the pricing of domestic fuel in US dollars means we no longer expect policy easing in 2026.

We now expect the CBN to keep the Monetary Policy Rate at 26.5 percent until after the 2027 elections, reversing our earlier expectation of 150 basis points of rate cuts this year. We expect the easing cycle to resume after the elections, beginning with a 250-basis-point rate cut in March 2027.

Uche Uwaleke, professor of Capital Markets, Nasarawa State University, and President, Capital Market Academics of Nigeria

I expect the Monetary Policy Committee to maintain a cautious stance at its July meeting and leave all policy parameters unchanged. Although inflation increased to 15.9 percent, the rise is consistent with the committee’s earlier assessment that inflation may see intermittent increases before resuming its downward path. Unless there is evidence of more persistent and broad-based inflation, particularly in core inflation, I do not expect the MPC to tighten policy further.

Another reason for a hold decision is the significant monetary tightening already in place. With the MPR at 26.5 percent, the Cash Reserve Requirement at 45 percent and a restrictive liquidity framework, monetary conditions remain sufficiently tight. Monetary policy works with a lag, and previous tightening measures are still filtering through the economy. Raising rates further could impose unnecessary costs on economic activity without delivering proportionate gains in reducing inflation.

Exchange rate stability will remain central to the Committee’s deliberations. As long as external reserves remain adequate and foreign exchange market conditions continue to improve, the MPC is likely to allow existing policy measures to continue working rather than introduce additional tightening. While the approaching election season could increase fiscal spending and liquidity, the committee is more likely to reinforce its commitment to price stability through strong forward guidance than respond with another rate hike.

Overall, I expect the MPC to retain the MPR at 26.5 percent, maintain the current asymmetric corridor and leave the CRR and other policy parameters unchanged. The communiqué is likely to acknowledge the slight increase in inflation while reiterating that the Committee remains prepared to act if inflationary pressures become more persistent or exchange rate stability comes under renewed pressure. A “hold and monitor” approach remains the most probable outcome.

Ayokunle Olubunmi, head of Financial Institutions Ratings, Agusto & Co

I expect the MPC to hold rates constant given the recent pressure on the exchange rate. Inflation has also not declined sufficiently to justify a rate cut.

Funmi Adebowale, Head of Research, Parthian Securities

We expect the MPC to maintain the current policy rate at its meeting next week. Although headline inflation eased marginally to 15.91 percent in June, following three consecutive monthly increases, the committee is unlikely to interpret the decline as the start of a sustained disinflation trend.

The renewed escalation of geopolitical tensions in the Middle East continues to pose upside risks to inflation. In addition, the recent depreciation of the naira, partly reflecting seasonal demand for foreign exchange associated with summer travel, warrants close monitoring. Against this backdrop, we expect the MPC to retain a tight monetary policy stance to preserve price and exchange rate stability while assessing whether inflation moderation can be sustained.

Tunde Abidoye, Head of Research, Quest Merchant Bank

I expect the MPC to keep rates on hold for two reasons. First, the external environment remains unsupportive of a policy pivot. The Middle East conflict continues to pose risks to energy markets, while Brent crude prices above $80 per barrel could sustain global inflation. Inflation in the United States also remains above target, reinforcing a higher-for-longer global interest rate environment and reducing the room for emerging and frontier market central banks to ease prematurely.

Second, domestic inflation at 15.9 percent remains too high. Although the inflation trajectory has improved, one or two favourable readings are insufficient to justify a policy shift. The MPC is likely to wait for clearer evidence that underlying inflation is easing sustainably before considering rate cuts. At this stage, the cost of waiting for more evidence is lower than the risk of easing too early and having to reverse course later. I therefore expect the committee to leave policy rates unchanged while maintaining a data-dependent approach focused on achieving durable disinflation.

Muda Yusuf, chief executive officer, Centre for the Promotion of Private Enterprise (CPPE)

The June inflation data do not warrant further monetary tightening. Headline inflation has largely stabilised, core inflation continues to moderate, and the main drivers of inflation remain structural rather than demand-induced.

Accordingly, we expect the MPC to maintain its current monetary policy stance. The priority should be stronger coordination between monetary and fiscal authorities to expand food supply, improve logistics, lower energy and production costs, reduce debt service costs, strengthen domestic value chains and improve productivity. These reforms offer the most sustainable path to lower inflation, stronger growth and improved living standards.

Ayodele Akinwunmi, chief economist, United Capital Plc

I expect the MPC to keep all policy rates unchanged. Although headline inflation eased slightly to 15.91 percent in June, it remains well above the CBN’s upper limit of its short- to medium-term target and its 2026 inflation forecast. With inflation still elevated and the need to preserve foreign exchange stability, maintaining the current policy stance is the most prudent option. The approaching general election cycle also makes it difficult to justify lowering interest rates.

Ayodeji Ebo, Investment professional

I expect the MPC to leave all policy rates unchanged. Although inflation declined in June, it remains elevated, and the committee is likely to wait for sustained moderation before considering policy easing. In addition, renewed pressure on the foreign exchange market and the widening gap between the official and parallel market exchange rates strengthen the case for maintaining a tight monetary stance to support naira stability and sustain foreign portfolio inflows.