The Central Bank of Nigeria is unlikely to cut its benchmark interest rate this week despite three straight months of slowing inflation, as rising crude oil and petrol prices cloud the outlook, United Capital Research has said. The firm’s assessment comes as the Monetary Policy Committee opens its two day meeting in Abuja on Monday, 22 September 2026, with a decision expected on Tuesday.
United Capital said the recent moderation in prices had been supported by the naira’s gains against the dollar, seasonal declines in food prices from the harvest, and a modest rise in crude oil output. But it argued that fresh energy pressures had changed the calculation. In its words, “the sharp increase in crude oil and Premium Motor Spirit (PMS) prices clouds the outlook for the next quarter, making a rate cut premature.”
The Monetary Policy Rate, or MPR, is the benchmark that sets the cost of money across the financial system. The firm expects the committee to hold it at 26.5 per cent, keep the standing facilities corridor at plus 50 and minus 450 basis points, and retain the Cash Reserve Requirement at 45 per cent for commercial banks and 16 per cent for merchant banks, with the liquidity ratio at 30 per cent.
The rate has stood at 26.5 per cent since February 2026, when the committee eased by 50 basis points from 27 per cent, its first reduction after a long tightening cycle that lifted the MPR from 18.75 per cent in September 2023. The committee has since held the rate at every meeting, most recently on 21 July, citing the need to sustain disinflation and stabilise the foreign exchange market. That was the position the bank’s governor, Olayemi Cardoso, set out at the July session.
The inflation data give the committee some room to consider easing. Figures from the National Bureau of Statistics show headline inflation fell to 15.39 per cent in August 2026, from 15.43 per cent in July and 23.14 per cent in August 2025. Food inflation, which weighs most heavily on low income households, eased to 19.57 per cent year on year, down from 25.30 per cent a year earlier, while monthly food inflation slowed sharply to 1.02 per cent from 5.56 per cent in July.
Set against that is the energy shock United Capital flagged. Global oil prices have climbed through 2026 on tensions linked to the conflict involving Iran, with Brent trading around 105 dollars a barrel in mid September, according to market data. Higher crude prices raise the landing cost of imported petrol, and because petrol pricing was deregulated after subsidy removal in 2023, that feeds through to pump prices and, in turn, to transport and food costs.
Other analysts have reached the same conclusion by different routes. Coronation Merchant Bank warned that sustained higher energy costs could feed into fuel and transport prices and slow the pace of disinflation, while CardinalStone said it expected a hold given the chance of further energy price volatility. Ayo Teriba, chief executive of Economic Associates, took a more cautious view of the data itself, arguing that three months of marginal decline did not yet establish a firm downward trend and that the committee should observe it for longer before acting.
United Capital also pointed to the external accounts as a stabilising factor, saying Nigeria’s external sector remained resilient enough to support short term exchange rate stability. The naira traded at about 1,322 to 1,329 to the dollar at the official Nigerian Foreign Exchange Market window in the second week of September, its firmest level in about two years, with parallel market quotes between roughly 1,385 and 1,410.
The firm ruled out a rate increase as well, saying a hike would raise business costs and work against the recent domestic gains. Its expectation is therefore a hold that buys time to gauge how global developments play out, a stance it summed up as allowing the committee to weigh improving domestic conditions against emerging global risks.
The decision carries weight beyond the banking system. A lower MPR would reduce borrowing costs for businesses and could support growth, but the bank has consistently prioritised bringing inflation down and holding the naira steady, and a premature cut risks undoing progress on both if energy driven price pressure returns.
What the committee actually decides will be known when the meeting closes on Tuesday. This is the penultimate MPC meeting of the year, and its communique will indicate not only the rate itself but whether the bank is preparing the ground for easing at its final session. The projections cited here are the views of analysts and research firms rather than confirmed outcomes, and the committee’s own reading of the balance between falling inflation and rising energy costs will settle the matter.