Nigeria's inflation eases to 15.9% but high CBN rates still block business credit – when to pivot?
Headline inflation fell to 15.91% in June 2026, with core inflation at 15.92% and food inflation higher at 17.52%. The foreign exchange market is calmer, the official rate near N1,380 to the dollar and the parallel-market gap under two percent. External reserves have surpassed $52 billion, a 17‑year high, and official‑channel remittances have surged while broad money growth cooled from above 56% in 2024 to under 14%. These gains reflect the CBN’s restrictive monetary policy and FX reforms, with the MPR held at 26.5% and the CRR at 45%.
While price stability has improved, the high policy rate and reserve requirement keep borrowing costs elevated, discouraging banks from lending to small and medium enterprises that lack access to retained earnings or foreign credit lines. Banks find government securities more attractive, which risks sacrificing the investment needed for growth. The article argues that stability is a means, not an end, and the MPC should look for sustained core disinflation, contained food inflation, anchored inflation expectations, orderly FX markets, and balanced liquidity before easing. A gradual pivot—cutting the MPR in steps, normalising the CRR, and ensuring liquidity translates into productive credit—would allow Nigeria to reap the dividend of its stability gains without reigniting inflation.