Dare Babalola
The Centre for the Promotion of Private Enterprise has commended the outcome of the 305th meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria, describing the decision to retain key monetary policy parameters as pragmatic and reflective of a deeper understanding of Nigeria’s inflation challenges.
In a statement issued on Wednesday, the Chief Executive Officer of CPPE, Muda Yusuf, said the decision to retain the Monetary Policy Rate (MPR) at 26.5 per cent demonstrated “policy maturity, strategic restraint and confidence in the direction of macroeconomic management.”
The MPC also retained the asymmetric corridor around the MPR, maintained the Cash Reserve Ratio (CRR) at 15 per cent for merchant banks, 45 per cent for deposit money banks and 75 per cent for non-TSA deposits.
According to Yusuf, the current inflationary pressures facing the Nigerian economy are largely structural and externally induced, rather than demand-driven.
He noted that rising geopolitical tensions involving Iran, Israel and the United States had increased volatility in the global energy market, pushing up crude oil prices and worsening domestic cost pressures in transportation, logistics and manufacturing.
“The decision to hold rates therefore demonstrates a commendable recognition that excessive tightening at this stage could suffocate productivity, weaken industrial recovery, constrain investment appetite and undermine employment generation,” he said.
“Economies do not grow on the strength of high interest rates; they grow on the strength of productivity, enterprise, investment confidence and policy coherence.”
The CPPE also praised the Central Bank for what it described as disciplined management of the monetary policy framework and the relative stability achieved in the foreign exchange market in recent months.
Yusuf said exchange rate stability had become “one of the most important anchors of macroeconomic confidence,” adding that it improves investor sentiment, moderates imported inflation and enhances planning predictability.
He further described the CBN’s recent policy direction as a transition “from crisis management to confidence management,” which he said was essential for restoring investor trust in the Nigerian economy.
The organisation also commended fiscal authorities for renewed commitment to fiscal consolidation and improved revenue performance, stressing that rising revenues should translate into lower fiscal deficits and reduced dependence on debt financing.
On the ongoing banking sector recapitalisation programme, CPPE said the exercise had been implemented seamlessly without triggering panic among depositors or shareholders.
“The recapitalisation programme is not merely a banking reform exercise; it is fundamentally a strategy for building a stronger financial intermediation framework capable of supporting long-term industrialisation, infrastructure financing and economic transformation,” Yusuf stated.
However, he urged the apex bank to maintain clear communication with banks still facing recapitalisation-related transition issues in order to sustain depositor confidence and financial system stability.
The CPPE concluded that the outcome of the 305th MPC meeting reflected “a balanced and intelligent policy calibration” aimed at supporting investment, productivity, industrialisation and sustainable job creation.
