PricewaterhouseCoopers ,PwC, has Predicted that Nigeria’s benchmark interest rate is likely to remain elevated in 2026 even as inflation shows signs of easing.
Speaking at the PwC–BusinessDay Executive Roundtable on Nigeria’s 2026 budget and economic outlook in Lagos on Thursday, the Chief Economist and Head of Strategy at PwC, Mr Olusegun Zaccheaus, said expectations of aggressive interest rate cuts might be premature even with the core factor, inflation, seen cooling.
“Interest rates may remain elevated despite inflation cooling for most of 2025″, Mr Zaccheaus said. “Perhaps not by the 500 basis points some hope for, due to the need to manage liquidity”.
The Central Bank of Nigeria ,CBN, had more than doubled its policy rate from 2022 levels in a bid to rein in inflationary pressures, before implementing a 50 basis-point cut in September that brought the monetary policy rate to 27%.
The move followed a sharp moderation in inflation from its late-2024 peak. Inflation slowed to 15.15% in December 2025, while the economy expanded by 3.98% in the third quarter, its strongest quarterly growth in years.
At the last Monetary Policy Committee ,MPC, meeting of the CBN in November 2025 voted to keep the interest steady.
The PwC official warned that warned that underlying risks, including exchange-rate volatility, fiscal pressures and global uncertainty, continue to complicate the outlook.
Mr Zaccheaus said that a major challenge for the apex bank will be to control the volume of money circulating in the economy.
He advised that liquidity management remains critical as excess cash can quickly undermine dis-inflation efforts particularly as the 2027 election cycle is around the corner.
He said that Nigeria typically experiences rapid growth in money supply ahead of election cycles, driven by increased government spending and political activity, adding that without careful coordination, such expansions risk fueling inflation and weakening investor confidence.
“The responsibility of the central bank is to ensure liquidity does not grow in a way that has a negative macroeconomic impact”, Mr Zaccheaus said.
He noted that a stable currency environment would support improved capital allocation and investment planning.
“FX stability is crucial”, Mr Zaccheaus said. “It gives investors confidence and allows businesses to plan. But that stability depends on disciplined policy execution”.
