CBN tipped to hold MPR at 26.50% as oil price surge clouds inflation outlook

Access Bank analysts expect the Monetary Policy Committee to hold the Monetary Policy Rate at 26.50 percent when it meets on September 21 and 22. The bank's Economic Intelligence Unit says policymakers are weighing falling inflation and accelerating growth against renewed external risks from a fresh surge in global oil prices.

That would leave the CBN in wait-and-see mode, preserving the gains of its restrictive stance while waiting for stronger evidence that disinflation is here to stay.

Inflation is cooling, growth is rising

Nigeria's real GDP expanded 4.43 percent in the second quarter of 2026, up from 3.89 percent in Q1. Headline inflation fell to 15.39 percent in August, while core inflation dropped sharply to 13.29 percent.

The monthly numbers were stronger still. Headline inflation slowed to 0.71 percent from 1.57 percent in July. Monthly food inflation fell to 1.02 percent from 5.56 percent.

For the MPC, those figures show that earlier tightening is working. They also give the committee a reason to wait. Cutting rates before disinflation is firmly established could reverse some of the progress already recorded in the currency and inflation markets.

Access Bank expects the committee to retain the 26.50 percent MPR, the asymmetric corridor of +50 and -450 basis points, the 45 percent Cash Reserve Ratio for deposit money banks, the 16 percent CRR for merchant banks and the 30 percent liquidity ratio.

Naira strength buys breathing space

The external position is one of the strongest arguments for patience. Foreign reserves reached $54.28 billion by September 8. The naira strengthened from N1,379.40 to the dollar on July 21 to N1,322.75 by September 7.

Foreign exchange turnover rose 15.65 percent in August to $14.68 billion. Stronger oil receipts, portfolio inflows and better FX liquidity have eased some of the pressure that previously constrained monetary policy. A more stable naira also helps contain imported inflation.

But the improvement carries an uncomfortable dependence on oil revenue.

Oil is both the cushion and the risk

Brent crude rose to about $97.92 a barrel by September 8, while Nigeria's Bonny Light hit $107.54.

For an oil-dependent economy, the immediate benefits are clear: stronger export receipts, higher FX inflows and more support for reserves. Higher crude prices, however, can feed into transport, energy and production costs. That could slow the fall in inflation at the exact moment policymakers begin asking whether monetary conditions can eventually be eased.

Geopolitical tensions have added more uncertainty, with concerns around the Strait of Hormuz and regional energy infrastructure raising the risk of prolonged oil price volatility. A higher oil price strengthens Nigeria's external accounts while potentially weakening the inflation outlook. That is one reason a rate cut now would be premature.

What markets will watch

For investors, the key signal from the September meeting may not be the rate itself but the MPC's view on how durable the disinflation is. Continued declines in inflation, steady currency stability and further reserve accumulation would gradually strengthen the case for lower rates. A renewed spike in food or energy prices could keep policy tight for longer.

Credit conditions also matter. Private-sector credit reached N83.43 trillion in July, while broad money supply rose to N138.88 trillion. The continued expansion of credit despite tight monetary conditions suggests the economy is adapting rather than stalling, which could make it easier for the CBN to cut later without hurting activity.

A hold would not close the door on easing, but it would confirm that the CBN wants disinflation to prove itself first. For the naira, that means the recent stability around N1,322 to N1,379 to the dollar has a better chance of holding, while borrowers should not expect cheaper credit before the external oil shock clears.