Gbenga Ilemobayo
Mr. Adewale-Smatt Oyerinde, Director-General, Nigeria Employers’ Consultative Association (NECA),has reacted to the recent decision of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), particularly the reduction of the Monetary Policy Rate (MPR) from 27.0 per cent to 26.5 per cent at its 304th meeting.
He emphasized that the marginal reduction in the benchmark interest rate represented a cautious but noteworthy signal that monetary authorities were beginning to respond to the sustained pressures facing businesses and the productive sector.
According to him, while the 50 basis point reduction may not immediately translate into significantly lower lending rates, it reflects a gradual shift toward supporting economic growth without undermining price stability.
The NECA Boss reiterated that the overall policy stance remained tight, given the retention of the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks, alongside the maintenance of the liquidity ratio at 30 per cent and the asymmetric corridor around the MPR.
He noted that with a substantial portion of bank deposits still sterilised, the capacity of financial institutions to expand credit to the real sector might remain constrained in the near term.
Oyerinde noted that the decision reflected a careful balancing act aimed at moderating inflation while avoiding excessive strain on businesses already grappling with high operating costs, exchange rate volatility, and weakened consumer demand.
He stressed that inflation, particularly in food, energy, and transportation, continued to pose significant challenges to employers and households alike.
He further stated that for the modest easing in policy rate to have meaningful impact, it must be complemented by coordinated fiscal and structural reforms that address supply-side constraints, improve infrastructure, and enhance productivity.
He urged financial institutions to ensure that the slight reduction in the MPR was gradually reflected in lending conditions for manufacturers, SMEs, and other productive enterprises.
Oyerinde affirmed that while the MPC had not fully relaxed its tightening stance, the reduction in the MPR signals cautious optimism.
He added that sustained improvements in inflation trends, exchange rate stability, and investor confidence would be critical in determining the scope for further monetary easing that supports growth, investment, and employment generation in the Nigerian economy.
