Interest rate cut under consideration as inflation slows
The Federal Government may consider cutting interest rates if inflation continues to moderate, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said.
Edun made the remarks during an interview with Bloomberg on the sidelines of the Abu Dhabi Sustainability Week.
Edun praises CBN’s anti-inflation drive
The minister commended the Central Bank of Nigeria (CBN) for what he described as “excellent” progress in curbing inflation, which declined to 14.45 percent in November 2025.
He attributed the improvement to aggressive monetary tightening measures implemented by the apex bank over the past two years.
According to Edun, sustained moderation in inflation could create room for a reduction in interest rates.
Fiscal pressure sharpens focus on borrowing costs
Edun’s comments come as the federal government faces increasing fiscal pressure from rising debt-servicing obligations, volatile oil revenues and a widening budget deficit.
He noted that any reduction in borrowing costs would ease pressure on public finances, particularly in managing debt repayments.
An interest rate cut, he said, could help lower the government’s debt-servicing burden and improve fiscal sustainability.
Recent policy shift by the CBN
The CBN cut its benchmark interest rate for the first time in three years in September 2025, reducing it by 50 basis points to 27 percent.
The move marked a shift after a prolonged period of tightening aimed at containing inflation and stabilising the economy.
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