Financial services giant, Stanbic IBTC, has projected a significant downward adjustment in Nigeria’s benchmark interest rate, forecasting a 200 basis points (bps) cut in 2025. This projection comes amid ongoing efforts by monetary authorities to strike a balance between inflation control and economic growth stimulation.
In its recent macroeconomic outlook, the financial institution noted that while the Central Bank of Nigeria (CBN) has taken an aggressive stance on interest rates in recent quarters—raising the Monetary Policy Rate (MPR) multiple times to tame inflation—conditions may shift by 2025, allowing room for rate easing. The expected cut, if implemented, would see the MPR drop by two percentage points, a move likely to ease borrowing costs for businesses and households across the country.
KIIN360 understands that Stanbic IBTC’s projection is based on anticipated improvements in Nigeria’s inflation profile, stabilisation of the exchange rate, and a more measured fiscal environment. With inflation recently peaking above 30 percent year-on-year, the CBN has raised interest rates to historic highs in a bid to curb rising prices and defend the naira. However, the financial institution believes that once inflation begins to trend downward—possibly due to improved food supply, tighter fiscal discipline, and less currency volatility—the apex bank could shift to a more accommodative monetary policy.
Analysts at Stanbic IBTC further highlighted that Nigeria’s economic recovery, while fragile, may gain more traction in 2025, especially if structural reforms in the energy and agricultural sectors begin to yield results. A lower interest rate environment, they argue, would support credit expansion and investment, which are crucial for sustained growth.
The CBN’s monetary policy decisions remain one of the most closely watched economic indicators in Nigeria, affecting everything from consumer loans to foreign investor sentiment. Any reduction in the MPR would mark a significant shift from the tightening cycle that began in mid-2022 and could signal the start of a new phase in economic management.
Although the projection remains speculative and contingent on multiple macroeconomic variables, Stanbic IBTC’s outlook offers a cautiously optimistic view of Nigeria’s economic direction heading into 2025. The bank has also urged policymakers to maintain discipline and avoid policy reversals that could derail progress in achieving price stability and investor confidence.
