Nigeria’s 15.39% Inflation Raises Interest Rate Cut Hopes

By Adedapo Adesanya

Headline inflation rate moderated marginally to 15.39 per cent year-on-year in August 2026, down from 15.43 per cent recorded in July, improving the case for the Central Bank of Nigeria (CBN) to resume easing of interest rates.

The latest figure represents a four basis points decline in the headline inflation rate, according to data contained in the latest inflation report by the National Bureau of Statistics (NBS) on Tuesday.

The August reading, however, was two basis points higher than the 15.37 per cent estimate.

On a month-on-month basis, the moderation was more pronounced as the growth in consumer prices slowed to 0.71 per cent in August, representing an 86 basis points decline from the 1.57 per cent recorded in July.

The slower monthly increase was driven largely by moderation in food prices, as well as a decline in the pace of increase in core inflation, which excludes farm produce and energy.

Food inflation declined by 75 basis points to 19.57 per cent year on year in August from 20.31 per cent in July.

The development was also reflected in the month-on-month movement of the food index, which slowed by 1.02 per cent in August, compared with a 5.56 per cent increase recorded in July.

The moderation in food prices was attributed to lower price increases across a number of key food items, including palm oil, carrots, pepper, onions, cassava flour, beef, yam flour, water yam, melon, fresh ginger, fresh fish, Irish potatoes, wheat grain, frozen chicken and turkey meat.

Meanwhile, core inflation, which excludes farm produce and energy, also recorded a significant moderation during the month under review. Core inflation eased by 168 basis points to 13.29 per cent year on year in August, compared with 14.97 per cent in July.

On a month-on-month basis, the core index declined by 0.06 per cent in August, reversing the 0.15 per cent increase recorded in July.

The Monetary Policy Committee (MPC) of the central bank will meet next week to decide the interest rate and other parameters. The latest inflation print will be taken into account in deciding whether to retain or cut from the current 26.50 per cent level announced at the last meeting in July.