The decision, reached during the first Monetary Policy Committee (MPC) meeting of 2026, marks a departure from the aggressive tightening cycle of the past two years.

The move was necessitated by a favourable convergence of fundamental economic forces, including easing inflationary pressures and a significantly bolstered external buffer.

The Numbers: A Measured Dovish Stance

While some market spectators had priced in a more aggressive 100bps cut, the 50bps reduction is seen as a calibrated strategy, mirroring the dovish pivots seen in other major African economies.

Key Drivers of the Rate Cut:

• Cooling Inflation: Persistent moderation in headline inflation provided the necessary room for the apex bank to ease.
• Stronger Naira: The local currency has maintained an impressive 6% year-to-date (YTD)
• Reserves Buffer: Foreign Exchange (FX) reserves recently hit a 13-year high, providing the CBN with enough ammunition to defend the Naira while lowering borrowing costs.

Analyst View: High Real Rates and FPI Attraction

According to Lukman Otunuga, Senior Market Analyst at FXTM, the rate cut is likely to have a stabilizing and potentially positive impact on the Naira.

He noted that even with the reduction, Nigeria’s interest rate remains one of the highest on the continent.

“Even with the 50-bp rate cut, real rates remain high when accounting for inflation. Nigeria’s interest rate is still one of the highest in Africa, which may attract Foreign Portfolio Investors (FPIs), lending the Naira further support,” Otunuga stated.

Mathew Anthony, also a Market Analyst at FXTM, added that the move would likely boost investor confidence ahead of the Q4 2025 GDP report scheduled for release later this month.

He emphasized that with favourable fundamentals at play, it was always a question of “how much” rather than “if” the rates would be cut.

The CBN is performing a delicate balancing act. By cutting the MPR by 50bps, the apex bank is signaling a pro-growth stance to the real sector without completely scaring off the carry-trade investors who have helped shore up the Naira.

What this means for you:

Borrowing Costs: Expect a gradual, albeit slow, reduction in the cost of commercial bank loans as the 50bps cut trickles down to prime lending rates.

Stock Market: Lower interest rates typically make equities more attractive. Expect a positive reaction in the NGX as investors rotate out of fixed income into stocks.

FX Stability: As long as Nigeria maintains one of the highest real interest rates in Africa, FPI inflows are expected to remain steady, supporting the Naira’s 6% YTD growth momentum.

The optimistic outlook is fueled by a surprise moderation in headline inflation, which cooled to 15.1% in January 2026, down from 15.2% in December, and the Naira’s sustained 8% appreciation against the dollar since the start of the year.

The Case for Easing: Inflation vs. Exchange Rate

Nigeria’s disinflation trend has gained significant momentum, defying earlier market projections of 19.5%.

Analysts at Cordros Research and FXTM suggest that the worst of the inflation cycle is now in the rearview mirror, providing the apex bank with the necessary room to recalibrate its aggressive tightening cycle.

Key Economic Indicators (Jan 2026):

• Headline Inflation: 15.1% (Year-on-Year)
• Naira Performance: ~8% appreciation YTD
• Lending Rates: Average maximum lending rate dropped to 29.32% in Dec 2025.

Analyst Perspectives: A Cautious Calibrated Cut

While the case for easing is strong, experts warn that the CBN will likely avoid a “shock” reduction to prevent reigniting price pressures.

Ayokunle Olubunmi, head of Financial Institutions Ratings at Agusto & Co., expects a maximum cut of 100 basis points.

“Even if there are adjustments to the Cash Reserve Ratio (CRR), it will likely be minor,” he noted, citing the need to balance growth support with liquidity control as government capital spending ramps up.

Lukman Otunuga, Senior Market Analyst at FXTM, highlighted that the unexpected dip in food prices has been a primary driver of the disinflation trend, reinforcing the argument for a rate reduction to stimulate the real sector.

The CBN appears to have reached an inflection point. After nearly two years of aggressive interest rate hikes that pushed borrowing costs to record highs, the tight money era is cooling.

A 100bps cut would signal to the markets that the CBN is gaining confidence in its currency stability measures and its new CPI series.

However, the real test will be the transmission mechanism. While the MPC may cut the MPR, businesses on the ground will be watching to see if commercial banks follow suit by lowering the 29.3% average lending rate, or if they will maintain high margins to protect their own liquidity buffers amidst the ongoing 2026 recapitalization exercise.

[Part of publication sourced from ThisDay]

According to market analysis by Lukman Otunuga, senior market Analyst at FXTM, headline inflation slowed to 15.1% year-on-year in January, down from 15.2% in December and significantly below the 19.5% medium estimate.

The moderation was largely driven by lower food prices, helping offset broader inflationary pressures across the economy.

CBN Rate Cut Expectations Rise

The latest inflation data has intensified speculation that the CBN may cut its benchmark interest rate after holding it steady at 27% in November.

Analysts note that easing price pressures, combined with the naira’s relative stability, provide room for policy recalibration. The naira has appreciated by approximately 8% against the US dollar year-to-date, reinforcing arguments for a shift toward monetary easing.

Market watchers now believe the debate is no longer whether the CBN will cut rates, but by how much.

A rate cut could provide relief to businesses and households, while also reshaping yield dynamics in Nigeria’s fixed-income market.

Oil in Focus as US-Iran Talks Resume

Beyond Nigeria, global markets are bracing for a potentially volatile week driven by geopolitics and key economic data releases.

On Tuesday, US-Iran talks in Geneva could influence the short-term trajectory of oil prices. Crude benchmarks have gained more than 10% year-to-date, supported by geopolitical tensions and supply risks.

A breakthrough in negotiations may ease supply concerns, while stalled talks could further tighten oil markets.

US PCE, Fed Minutes and GDP Data to Drive Markets

The main global focus this week will be US macroeconomic data, including:

• Federal Reserve meeting minutes
• December Personal Consumption Expenditures (PCE) report
• Delayed US Q4 GDP figures

The PCE report, the Federal Reserve’s preferred inflation gauge, will offer fresh insight into consumer spending trends, while GDP data will provide clarity on the health of the world’s largest economy.

Last week’s softer-than-expected US CPI data strengthened expectations of rate cuts, with traders now pricing a roughly 50% probability of three Federal Reserve rate cuts in 2026.

Should upcoming data reinforce dovish expectations, the dollar may weaken further, potentially supporting gold and US equities.

Bitcoin Under Pressure, $60,000 Level in Sight

In the cryptocurrency market, Bitcoin remains under pressure, down more than 20% year-to-date, with prices hovering near the $70,000 level.

Daily technical charts indicate that $60,000 could serve as a potential liquidation zone, according to Bloomberg reports.

Market direction in crypto is likely to be influenced by broader risk sentiment and US macro data.

Gold Tests $5,000 Psychological Level

Gold ended last week above the $5,000 psychological level but started the new week cautiously.

With Chinese markets closed, liquidity may remain thin, leaving gold vulnerable to geopolitical headlines and US data surprises.

If $5,000 holds as support, bullion could rebound toward $5,100. However, a sustained break below this level may trigger declines toward $4,880 and $4,850.

What this Means for Nigeria

For Nigeria, the combination of easing domestic inflation and a potentially softer US dollar environment may offer macroeconomic breathing space.

However, global volatility, oil price movements, and US monetary policy shifts will continue to shape capital flows, exchange rate stability, and investor sentiment in the week ahead.

Today, that problem was cut significantly as FXTM, a global leader in online trading, shed more light on FXTM Edge, a new account designed to make trading simpler, cheaper, and accessible to everyday Nigerians.

At the Marriott Hotel, Ikeja GRA, FXTM executives engaged the media, breaking down how the product, recently launched in Nigeria, reduces entry barriers for beginners while still offering unique value for experienced traders.

Until now, Nigerian traders needed a minimum deposit of $200 to begin trading with FXTM. FXTM Edge reduces this to just $50 (₦ exchange equivalent), opening the door for students, young professionals, and anyone curious about forex or commodities.

“Many Nigerians are interested in trading but are held back by complexity, high costs, or lack of experience,” said Adaeze Uzochukwu, Specialist, Education & Media at FXTM. “FXTM Edge was built to remove those barriers and give everyone a chance to participate in global markets confidently.”

The platform allows users to trade in micro lots, manage risks more effectively, and benefit from an in-app reward system. For every lot or unit traded, users can earn credits which can either be withdrawn or reinvested.

Features for New and Experienced Traders

The new platform was built as a mobile-first solution, targeting Nigeria’s smartphone-driven financial culture.

For beginners, FXTM Edge provides:

• A clean, user-friendly interface free from overwhelming charts.
• Built-in education materials, tutorials, and trade inspiration.
• Micro account options to help new traders test strategies gradually.

For experienced traders, the app offers:

• Competitive spreads from 1.2, sharper than most existing platforms.
• Speed and flexibility for those who prefer mobile over desktop trading.
• Low-risk testing of strategies with smaller deposits.
• Instant deposits and withdrawals in both naira and dollar accounts.

“FXTM Edge is more than just a trading account; it is a gateway for Nigerians to enter the financial markets with confidence,” Uzochukwu added.

Why Nigeria?

On why the app was designed specifically for Nigerians, Uzochukwu explained that the country represents one of Africa’s largest untapped retail trading markets. “It doesn’t matter whether you’re a medical professional, lawyer, student, or businessperson. Everybody is our target audience, so long as you’re interested in trading and making extra money.”

During the roundtable, concerns about regulation in Nigeria’s trading sector were raised, noting that most brokers operate under foreign licences. Uzochukwu admitted that regulatory clarity is a challenge.

“My personal opinion is that SEC has not put out a policy to deal with forex trading,” she said. “That is why the industry looks unstructured. But it doesn’t affect us negatively, because we are very legitimate. We have an office in Nigeria, and whenever issues arise, we clarify with the regulators.”

She further disclosed that FXTM pays required taxes, including through the Federal Inland Revenue Service (FIRS), and has held discussions with government agencies to push for broader regulation.

Building Trust in a Growing Market

Uzochukwu also noted that FXTM has a strong track record on the continent, backing its growth with award-winning platforms, tailored education, and years of operational presence in Africa.

To demonstrate how small deposits can still make a difference, she narrated the story of a Nigerian client who once deposited small amounts between $500 and $2,000 to test strategies. Years later, with greater confidence, he began depositing up to $1 million.

“That is the power of starting small. With FXTM Edge, Nigerians can now do the same, without fear of losing everything upfront,” she said.

With FXTM Edge, the company believes that a simplified, mobile-first, and lower-cost approach will enhance Nigerian participation in global markets.

The day kicks off at 6:30 AM sharp with registration, setting the stage for an adrenaline-fueled main race starting at 7:30 AM.

Over the course of four intense hours, cyclists will go head-to-head across three exhilarating categories: Professional, Junior, and Veteran. And for the champions? A cash prize starting at ₦800,000 awaits – a true reward for those who dare to push their limits.

It’s not just about the race – it’s about the experience. Expect a vibrant atmosphere with refreshments, music, and the perfect opportunity to mingle with like-minded cycling enthusiasts. Whether you’re a racer or a spectator, there’s something for everyone to enjoy.

The Country Representative for FXTM, Kelechi Ehibudu said said:

“At FXTM we believe in unlocking potential and empowering individuals with ‘the freedom to succeed.’ Cycling, as a sport, perfectly captures this value – the freedom to ride, to push boundaries, and to achieve greatness.

This event is part of FXTM’s global commitment to promoting fitness, well-being, and community engagement.

“We’re thrilled to bring this spirited race to Lagos. Cycling is not just a sport – it’s a celebration of determination, endurance, and the unyielding drive to succeed. It perfectly resonates with our mission to empower people to achieve their goals, both in trading and in life.”

The Lagos Monthly Crit is more than just a race – it’s a celebration of freedom, fitness, and community unity.

Whether you’re competing for the prize or simply soaking in the energy of the event, this is an experience you won’t want to miss.

The competition, which drew 190 participants from states including Port Harcourt, Kwara, Ibadan, Ogun, and Lagos, highlighted the spirit of sportsmanship and community engagement.

The event featured six categories—Professional Male, Professional Female, Junior Male, Junior Female, Veteran Male, and Veteran Female—offering opportunities for cyclists of all skill levels to compete.

Starting at 6:30 a.m., the race saw Juniors completing 10 laps, Veterans tackling 14, and Professionals racing an impressive 20 laps, with each lap spanning 2.8 kilometers.

Impressive Prizes for Top Performers

Participants competed for substantial cash prizes, with winners in the Professional categories receiving ₦500,000, ₦300,000, ₦200,000, and ₦150,000 for 1st to 4th positions, respectively. Cyclists finishing in 5th to 15th places were also rewarded with ₦50,000 each.

In the Junior Male and Female categories, winners earned ₦150,000, ₦100,000, and ₦50,000 for the top three spots.

Veteran winners took home ₦250,000, ₦150,000, and ₦100,000 for 1st, 2nd, and 3rd positions, respectively.

A Celebration of Sportsmanship and Unity

Participants and spectators alike praised FXTM for organizing the event, which fostered a sense of unity and offered a platform for cyclists to showcase their talents.

Many attendees expressed gratitude for the opportunity to take part in such a well-organized and inclusive competition, hoping for more events of this nature in the future.

The event also reflected FXTM’s commitment to empowering communities and promoting values that align with their parent company Exinity’s philosophy of “freedom to succeed.”

Looking Ahead

Kelechi Ehibudu, the stand-in country representative for FXTM, said: “FXTM is delighted to sponsor this Community cycling charity event. With its resounding success, this event has set a new benchmark for community-focused initiatives in Nigeria.

FXTM’s dedication to blending sport, charity, and empowerment has left a lasting impression, inspiring many to look forward to future events.”

Interested participants should register at 6:30 AM and prepare for the main race, kicking off at 7:30 AM.

Participants will compete for four thrilling hours in three categories: Professional, Junior, and Veteran.

The top prize starts at $500, adding an exciting competitive edge to the event.

There will also be refreshments, music and an opportunity to socialize with like-minded individuals.

FXTM, known for its global commitment to promoting fitness through charitable cycling events, is thrilled to bring this spirited race to Lagos. Riding has always been synonymous to freedom, matching the company’s value of freedom to succeed.

The event not only aims to foster a love for cycling but also to enhance community fitness and well-being.

Kelechi Ehibudu, the stand-in country representative for FXTM, said: “We are thrilled and delighted to sponsor this event as part of our charitable project.

“We look forward to an exciting time with all participants from all works of life. It’s going to be action packed event.”

Held in the vibrant heart of Africa, the event united traders and enthusiasts from diverse backgrounds in a quest for a coveted $2000 prize pot while highlighting FXTM Academy’s commitment to enhancing trading skills.

The Battle Royale was strategically designed to answer the age-old question: Who makes more profitable traders, men or women? Two formidable teams, four talented men and women representing diverse regions of Nigeria, engaged in a spirited competition.

Each participant received $2500 in their personal FXTM live trading account, with four weeks to demonstrate their trading prowess.

Real-time coaching by FXTM trainers fostered insightful debates on trading strategies, empowering clients to identify and address their strengths and weaknesses.

The event not only provided valuable learning experiences, but encouraged participants to recognize and address their trading weaknesses. FXTM trained and seasoned expert,  Matthew Anthony stated that “It was key to recognize one’s strengths and weaknesses; to keep a trading journal, learn from mistakes, and read daily articles on our website.”

Ayokunle Faniku, the most profitable trader, credited his success to rule adherence, fundamental understanding, technical analysis, and risk management, while Onyekaonu Victoria, a member of the female Team, shared her profound insight, saying, “It has helped me to realize – we make mistakes, we can go back and look at our mistake – and we know how to move forward.”

While showcasing FXTM’s commitment to enhancing trading knowledge, the Battle Royale spotlighted Nigeria’s ever-evolving financial landscape.

As the Nigerian economy continues to grow, the finance sector witnesses significant changes, with the Nigerian Naira (NGN) remaining a focal point for investors. FXTM remains dedicated to providing insights for navigating Nigeria’s dynamic financial ecosystem effectively.

FXTM continues its mission to foster informed and proficient traders with the Battle Royale event. Anticipating ‘Battle Royale 2.0’ in November, on a more inclusive and broad spectrum than just answering the age-old question, FXTM invites aspiring traders to compete for a $1000 prize (withdrawal fund).

Think you have what it takes to be the next trading champion?

Unlike the United States which has witnessed consumer prices coming down from a peak of 9.1% in June 2022, Nigeria’s inflation remains hot, stubborn, and unyielding.

The current annual inflation rate for Africa’s largest economy stands at a whopping 22.8 % – its highest since September 2005.

With the inflation beast drawing strength from rising food prices, transportation, and import costs, it is forecast to tick even higher for July. Ultimately, persistent signs of rising inflation may force the Central Bank of Nigeria to act once again at its next policy meeting in September.

It is worth keeping in mind that the CBN has recently lifted its benchmark rates by 25bp to 18.75% – its fourth consecutive rate hike in 2023. While higher rates have the potential to cap and control inflation, it could come at the cost of economic growth which expanded by 2.31% during the first quarter of 2023.

In the currency space, the Naira took another beating on the black-market exchange last Friday.

The local currency slumped to N932 as dollar shortages worsened two months after the CBN adopted a flexible exchange rate regime. Should the current themes negatively impacting the Naira remain present, prices may hit N1000 in a matter of time. Such a development that will most likely increase the cost of living and squeeze households further in the short to medium term.

Outside of Nigeria, we have witnessed how higher interest rates have somewhat capped and controlled inflation albeit at a price. For Africa’s largest economy, the key question is when will inflation eventually peak?

The US Dollar & Fed Minutes 

Dollar weakness could become a major theme in the second half of 2023 as the Fed concludes its hiking cycle. 

With inflationary pressures easing in the United States and the Federal Reserve shifting to data dependence for future monetary policy decisions, the odds of another hike are falling significantly. According to Fed fund futures, traders are only pricing in only a 10% chance of a rate hike in September and 32% probably by November 2023.

Should expectations become reality, the USD is likely to weaken against not only G10 majors but emerging market currencies over the next few months. The pending Fed meeting minutes are likely to accelerate the potential dollar selloff if they strike a dovish tone.

Commodity Spotlight – Oil 

Oil prices have the potential to push higher amid growing optimism over the global demand outlook. According to the International Energy Agency, global demand for oil has surged to a record thanks to strong consumption from China.

On the supply side, production cuts from OPEC+ have fueled concerns around tighter supply, further supporting upside gains.

Focusing on the technical picture, Both WTI Crude and Brent are trading near key resistance levels and may experience a breach to the upside in the short to medium term. After experiencing a rebound back in June, an oil trade back to $100? Time will tell. 

As other countries across the globe waged war on rising prices, Africa’s largest economy experienced periods of cooling inflation.

This anomaly was a welcome development for the Central Bank of Nigeria (CBN) and offered room for interest rates to be left unchanged in an effort to stimulate economic growth.

Fast forward to today, Nigeria’s annual inflation is back on the rise – accelerating for the fourth straight month to 17.71% in May.

It was the steepest inflation rate since last June, fuelled by rising food prices, soaring diesel prices, and ongoing dollar shortages.

On top of this, surging global commodity prices and pre-election spending have the potential to fuel the fire – especially after the IMF projected prices to rise between 18% and 22% in 2022.

The war in Ukraine has propelled global oil prices to levels not seen since 2014. This has sent shockwaves across the world and prompted central banks to adopt an aggressive approach toward raising interest rates.

While other oil-producing countries are enjoying the gift of soaring commodities, Nigeria has failed to cash in thanks to sub-optimal oil production, heavy reliance on gasoline imports, and fuel subsidies.

Meaning that the current commodities boom is not translating to higher export earnings for Nigeria but to higher costs and inflationary risks.

During the first quarter of 2022, Nigeria’s economy slowed for the third consecutive quarter to 3.1%. The CBN projects economic growth to be 3.2% this year while the IMF sees the country expanding by 3.4%.

However, Nigeria’s economic outlook remains threatened by disruptive power outages, foreign exchange shortages, capital outflows, and untamed inflation.

Given how the CBN has triggered a tightening cycle, more hikes are expected down the road. Back in May, the central bank surprised markets with a 150-basis point rate hike.

With the CBN now focused on fighting inflation and interest rates rising rapidly across the globe, more hikes could be on the table to limit capital outflows.

According to a report on Bloomberg, the CBN is expected to raise interest rates by 50 basis points two additional times in 2022 – bringing benchmark rates to 14%.

Theoretically, the rate hikes could limit inflation risks at a time when external and domestic factors are threatening Nigeria’s economy.

Ongoing geopolitical risks, extreme weather, and supply-chain disruptions could feed the inflation monster, while pre-election spending ahead of the general elections is likely to exacerbate the negative situation.

But the burning question is whether Nigeria is in a position to handle higher interest rates? Time will tell.

For more information, visit: FXTM