Election-related fiscal injections and rising system liquidity are emerging as the dominant risk shaping expectations ahead of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) meeting, with analysts saying that premature easing could destabilise recent gains in inflation and exchange rate stability.
Despite declining inflation and improving macroeconomic fundamentals, analysts say the CBN is likely to prioritise liquidity control over rate cuts, reflecting concerns that election-cycle spending could inject significant liquidity into the financial system and reignite inflationary pressures.
Analysts at the FMDA research in their pre-MPC assessment noted that election-related fiscal expansion seems to be a major concern to the Committee based on their last meeting in November 2025.
