Nigeria has recorded a five-month streak of disinflation, providing monetary authorities with the space to ease policy and support economic recovery.
Headline inflation eased to 20.12 percent in August 2025 from 21.88 percent in July, according to the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) communiqué released after its September 22–23 meeting.
The decline was driven by moderation in both food and core components as food inflation dropped to 21.87 percent from 22.74 percent, while core inflation fell to 20.33 percent from 21.33 percent.
On a month-on-month basis, headline inflation slowed sharply to 0.74 percent from 1.99 percent in July.
The MPC attributed the disinflation trend to exchange rate stability, lower prices of Premium Motor Spirit (PMS), improved capital inflows and increased crude oil output. These factors, combined with a surplus current account balance, have helped anchor inflation expectations.
The sustained moderation in prices informed the Committee’s decision to cut the Monetary Policy Rate (MPR) by 50 basis points to 27.00 percent at its 302nd meeting.
Policymakers noted that the easing cycle was supported by stable external reserves of $43.05 billion as of September 11, 2025, providing 8.28 months of import cover.
The disinflation momentum offers relief for policymakers who had tightened aggressively in previous quarters to contain price growth.
The MPC, however, stressed the need for continued vigilance against excess liquidity pressures, particularly from fiscal injections, to preserve macroeconomic stability.