The International Monetary Fund has endorsed the Central Bank of Nigeria’s September interest rate cut, describing it as an appropriate move amid significant progress in curbing inflation, despite continued tight monetary policy.

Zeine Ould Zeidane, director of the IMF’s African Department, made the remarks during a press briefing at the ongoing 2026 IMF-World Bank Annual Meetings in Thailand.

He said the interest rate cut was justified by the progress made in reducing inflation from previously elevated levels.

“What I say [on monetary policy] is that in the case of Nigeria, they have made significant progress lowering inflation. Because it has been coming from huge levels and they had high, real interest rates. And they decided to normalise the monetary policy, to lower those real interest rates, which is appropriate in our view. This is the right thing to do,” Zeidane said.

However, he cautioned that the move should not be seen as a full shift towards monetary easing, noting that the overall policy stance remains restrictive.

Zeidane said the CBN’s decision to cut interest rates was warranted by the progress made in curbing inflation, adding that monetary policy decisions should remain guided by incoming economic data.

“And it’s not easing yet because the stance itself remains a tight one,” he said.

“So, the qualification that the central bank did is the right one in our view,” Zeidane added.

“Monetary policy has to remain data dependent, but the focus should be on making sure that you bring inflation to your target”.

Meanwhile, the IMF’s latest regional assessment warned that monetary tightening “may be needed” in most countries, signalling a firmer stance than its April assessment, which described the policy outlook as a “difficult balancing act”.

The IMF’s position indicates that while it supports Nigeria’s interest rate cut, future monetary policy decisions will depend on inflation trends and progress towards the CBN’s inflation target.

At the end of its 307th Monetary Policy Committee (MPC) meeting in September, the CBN cut the Monetary Policy Rate (MPR) by 350 basis points, against widespread expectations that it would retain the existing rate.

The decision lowered the benchmark rate to 23 per cent from 26.5 per cent, marking a shift in the bank’s monetary policy stance following progress in easing inflationary pressures.