CBN Faces Pressure to Reduce Interest Rates
Nearly two-thirds of Nigerians are demanding a reduction in borrowing costs ahead of the Central Bank of Nigeria’s Monetary Policy Committee meeting scheduled for May 19 and 20, 2026, according to the apex bank’s own survey data.
The CBN’s April 2026 Inflation Expectations Survey Report, released by its Statistics Department under the Economic Policy Directorate, found that 63.3 per cent of respondents favoured lower interest rates, while 26.0 per cent preferred rates remain unchanged and just 10.7 per cent supported a further hike.
“The survey revealed high public engagement with CBN communications (92.1 per cent), a general perception of transparency (93.3 per cent), and a strong desire for a reduction in interest rates (63.3 per cent),” the report stated.
The survey, which covered 3,587 respondents comprising 1,923 firms and 1,664 households, also revealed deepening inflation anxieties. The proportion of respondents describing inflation as high rose sharply to 67.2 per cent in April from 56.4 per cent in March. The Inflation Perception Index stood at 40.5 points, signalling that most Nigerians still considered prices uncomfortably elevated.
Households earning below N70,000 monthly recorded the steepest inflation perception at 77.9 per cent, while rural households reported higher distress at 70.4 per cent compared to 67.6 per cent among urban respondents. Micro businesses recorded the highest business inflation perception at 69.9 per cent.
Respondents identified energy costs, transportation, exchange rate pressures, insecurity, and infrastructure deficits as the principal drivers of rising prices.
Economist and CEO of the Centre for the Promotion of Private Enterprise, Muda Yusuf, warned against further monetary tightening ahead of the 305th MPC meeting. “The Nigerian economy remains fragile and structurally constrained. Further tightening of monetary conditions could significantly weaken credit expansion, dampen investment appetite, and undermine the fragile recovery momentum within the real sector,” he stated.
Yusuf argued that Nigeria’s inflation was largely supply driven, making additional rate hikes less effective. He urged the CBN to adopt “a carefully calibrated and balanced monetary policy stance that preserves macroeconomic stability while avoiding excessive tightening capable of undermining economic recovery.”
Analysts at United Capital Plc Research similarly projected that the MPC would hold the Monetary Policy Rate at 26.5 per cent, keep the Cash Reserve Ratio for commercial banks at 45 per cent, and maintain the liquidity ratio at 30 per cent at the upcoming meeting.
Their Monetary Policy Watch report dated May 14, 2026 noted that Nigeria’s Composite Purchasing Managers’ Index had slipped into contraction at 49.4 points in April from 53.2 points in March, raising concerns over weakening business confidence.
“If the contraction continues, the outlook suggests weaker business confidence, lower investment activities, and a decline in GDP growth,” the analysts warned.