Renowned economist and financial analyst, Bismark Rewane, has predicted that the Central Bank of Nigeria (CBN) may consider a modest interest rate cut of 25 basis points at its upcoming Monetary Policy Committee (MPC) meeting scheduled for July.
Rewane’s forecast is based on recent macroeconomic developments, particularly the steady decline in Nigeria's inflation rate, which dropped to 22.22% in June. This marks a significant improvement, reflecting the impact of ongoing monetary tightening, exchange rate adjustments, and fiscal reforms being implemented by the Federal Government.
According to Rewane, the CBN may take a dovish approach in response to local economic indicators, despite the upward pressure on global inflation rates, especially in advanced economies like the United States and the Eurozone.
"The MPC may be inclined to ease just slightly, with a 25 basis points rate cut, as headline inflation appears to be decelerating and the naira is stabilizing," Rewane noted in his recent economic outlook released on Thursday.
The naira traded at N1,530 per dollar in the parallel market on Thursday, a level that analysts say is gradually approaching a more market-reflective value compared to earlier volatility seen earlier in the year.
Rewane, who is the Managing Director of Financial Derivatives Company Limited, also emphasized that a cautious rate cut could serve as a signal to businesses and investors that the worst of the inflationary cycle may be behind.
The Central Bank has held rates high in recent months in a bid to rein in inflation and support the local currency, which has suffered steep depreciation following the unification of the exchange rate windows.
The July MPC meeting will be closely watched by market participants, businesses, and international observers as they assess the CBN’s next move in managing Nigeria’s complex monetary landscape.