The International Monetary Fund (IMF) has described the Central Bank of Nigeria’s (CBN) September interest rate minimize as the proper transfer, saying Nigeria has made vital progress in decreasing inflation whereas financial coverage stays tight.
Zeine Ould Zeidane, director of the IMF’s African Department, stated this at a press briefing at the ongoing IMF-World Bank Annual Meetings 2026 in Thailand.
He stated the determination to decrease interest charges was applicable given the progress made in bringing inflation down from elevated ranges.
- “What I say [on monetary policy] is that in the case of Nigeria, they have made significant progress lowering inflation. Because it has been coming from huge levels and they had high, real interest rates. And they decided to normalise the monetary policy, to lower those real interest rates, which is appropriate in our view. This is the right thing to do,” Zeidane stated.
He added that the adjustment shouldn’t but be interpreted as a full easing of financial coverage as a result of the general stance stays restrictive.
IMF backs CBN’s interest rate minimize
Zeidane stated the CBN’s determination to cut back interest charges was justified by the progress made in tackling inflation, whereas stressing that financial coverage should proceed to reply to financial knowledge.
- “And it’s not easing yet because the stance itself remains a tight one,” he stated.
- “So, the qualification that the central bank did is the right one in our view,” Zeidane added.
- “Monetary policy has to remain data dependent, but the focus should be on making sure that you bring inflation to your target”.
The IMF’s newest regional evaluation additionally warned that financial tightening “may be needed” in most nations, adopting a firmer place than its April evaluation, which referred to a “difficult balancing act.”
The Fund’s place means that whereas Nigeria’s rate discount is seen as applicable, future financial coverage selections will want to mirror inflation developments and progress in direction of the CBN’s goal.
CBN cuts benchmark rate to 23%
At the conclusion of its 307th Monetary Policy Committee (MPC) assembly in September, the CBN reduced the Monetary Policy Rate (MPR) by 350 basis points, regardless of widespread expectations that it could depart charges unchanged.
The discount lowered the benchmark rate to 23% from 26.5%, marking a shift in the financial institution’s coverage stance following progress in moderating inflation.
Alongside the rate minimize, the MPC recalibrated the Standing Facilities Corridor whereas retaining current Cash Reserve Requirement (CRR) ranges for Deposit Money Banks, Merchant Banks and non-Treasury Single Account public sector deposits.
The determination adopted a interval of tight financial coverage geared toward bringing inflation underneath management. The CBN’s newest adjustment additionally displays its evaluation of prevailing financial circumstances.
Nigeria’s inflation rate continues to ease
Nigeria’s headline inflation rate declined to 15.39% in August 2026 from 15.43% in July, in accordance to knowledge launched by the National Bureau of Statistics (NBS).
The marginal decline prolonged the nation’s disinflation pattern for a 3rd consecutive month, offering context for the CBN’s determination to decrease the benchmark interest rate.
However, the IMF has emphasised that financial coverage should stay data-dependent, with the precedence being to deliver inflation in direction of the central financial institution’s goal.
