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63.3% of Nigerians want interest rates reduced, CBN survey shows ahead MPC meeting
The Central Bank of Nigeria has revealed that 63.3 percent of Nigerians are calling for a reduction in interest rates, just days before the Monetary Policy Committee meeting scheduled for May 19 and 20, 2026.
The figure comes from the CBN’s April 2026 Inflation Expectations Survey Report, released by its Statistics Department under the Economic Policy Directorate.
The report noted high public engagement with CBN communications, with 92.1 percent of respondents following the bank’s messaging, while 93.3 percent described the CBN as transparent. On rate preferences, 26.0 percent wanted rates kept at current levels, and only 10.7 percent supported further hikes.
The survey found that inflation perception worsened in April, with 67.2 percent of respondents describing inflation as high, up from 56.4 percent in March.
The Inflation Perception Index stood at 40.5 points, indicating that inflation is still seen as elevated. Households felt the pinch more than businesses: 68.8 percent of households perceived high inflation versus 65.9 percent of businesses. Micro businesses recorded the highest inflation perception at 69.9 percent, while medium businesses recorded the lowest at 63.2 percent.
Income disparity was stark: households earning below N70,000 monthly reported the highest inflation perception at 77.9 percent, while those earning between N250,001 and N350,000 reported the lowest at 46.6 percent. Rural households also felt inflation more acutely, with 70.4 percent rating it high compared to 67.6 percent in urban areas.
Respondents identified energy costs, transportation, exchange rate pressures, insecurity, and infrastructure challenges as the top drivers of rising prices. Despite current concerns, many expressed optimism that inflation could moderate over the next six months.
Specifically, 58.5 percent expected inflation to increase next month, while 56.7 percent and 54.4 percent expected rises over three and six months respectively. However, the proportion expecting inflation to decline grew from 11.0 percent (next month) to 20.4 percent (six months).
On spending, 67.9 percent of respondents expected their expenditure to rise in the current month, with businesses slightly higher at 69.0 percent compared to 66.7 percent for households.
The survey covered 3,587 respondents — 1,923 firms and 1,664 households — drawn from the NBS establishment frame and the NPC’s enumeration areas.
Ahead of the 305th MPC meeting, economist Muda Yusuf said the committee would likely consider heightened geopolitical uncertainties and emerging fiscal liquidity risks, including rising political spending ahead of the 2027 elections and improved FAAC allocations to states.
He noted a strong possibility that the MPC would lean toward a cautious tightening bias or maintain the current tight stance. However, Yusuf warned against additional rate hikes, arguing that the economy remains fragile and structurally constrained, with inflation driven largely by supply-side factors — energy, transport, logistics bottlenecks, and infrastructure — rather than excess demand.
“Monetary tightening is generally more effective in addressing demand-pull inflation,” Yusuf said, adding that higher rates would raise borrowing costs, weaken manufacturing competitiveness, suppress small business growth, and slow job-creating investments. He urged a carefully balanced policy stance.
Analysts at United Capital Plc Research also projected that the MPC would likely retain the current monetary policy stance at the May meeting. In its Monetary Policy Watch report dated May 14, 2026, the firm noted that the US-Iran crisis had worsened inflationary risks through higher crude oil prices and transport costs. While an inflation uptick would ordinarily justify a rate hike, the analysts said the current trend is largely supply-driven and transitory, making further tightening less effective. They also pointed to exchange rate stability and improving oil production as support for holding steady.
The analysts warned that Nigeria’s Composite PMI fell into contraction territory at 49.4 points in April from 53.2 in March. “If the contraction continues, the outlook suggests weaker business confidence, lower investment activities, and a decline in GDP growth. Under this condition, an expansionary monetary policy may be appropriate,” they said.
United Capital projected that the MPC would keep the Monetary Policy Rate at 26.5 percent, maintain the Cash Reserve Ratio for commercial banks at 45 percent, and hold the liquidity ratio at 30 percent.
However, it expects an adjustment of the CRR on non-TSA public sector deposits to 85 percent from 75 percent.
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