Nigeria’s inflation eased to 21.88 percent in July from 22.22 percent in June, according to new figures from the National Bureau of Statistics, NBS. The slowdown has fuelled expectations of a rate cut when the Central Bank’s Monetary Policy Committee meets in September.
Analysts at United Capital, a financial institution in Nigeria, say lower interest rates could reduce borrowing costs, lift equities and open fresh opportunities for investors, while also encouraging more firms to tap the domestic capital market.
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But financial services group Norrenberger warned that easing could dampen foreign investor appetite, weigh on FX inflows and add pressure to the naira, especially with seasonal outflows linked to travel and tuition.
At its July meeting, the MPC kept the benchmark rate at 27.5 percent, citing the need to sustain the fragile disinflation trend and manage persistent risks to consumer prices.
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