Nigeria: Slower trajectory supports cautious easing – Standard Chartered

💡 DMK Insight

Nigeria’s January CPI drop to 15.1% is a game changer for traders focused on emerging markets. This unexpected decline could signal a shift in monetary policy, making the naira more attractive for forex traders. If inflation continues to fall, the Central Bank of Nigeria might consider easing interest rates, which could boost economic activity but also impact currency strength. Traders should keep an eye on the naira’s performance against major currencies, especially if the CPI trend continues downward. The forecasted average CPI of 12.0% in 2026 suggests a longer-term stabilization, but the immediate focus should be on how the market reacts to this data. Look for key levels around the naira’s recent trading range, as a break could lead to increased volatility. However, it’s worth noting that while lower inflation is generally positive, it could also raise concerns about economic growth. If consumer spending slows, the naira might not strengthen as expected. Watch for any comments from the Central Bank regarding future policy shifts, as they could provide crucial insights into market direction.