By Seun Ibiyemi
The Centre for the Promotion of Private Enterprise (CPPE) has commended the Central Bank of Nigeria (CBN) for retaining all key monetary policy parameters at the 305th meeting of the Monetary Policy Committee (MPC), describing the decision as pragmatic and reflective of a deeper understanding of Nigeria’s inflation challenges.
In a statement issued on Tuesday, the Chief Executive Officer of the CPPE, Muda Yusuf, said the decision to retain the Monetary Policy Rate (MPR) at 26.5 per cent demonstrated policy maturity and strategic restraint at a time of heightened global economic uncertainty.
The MPC also retained the asymmetric corridor around the MPR, 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, particularly due to rising geopolitical tensions involving Iran, Israel and the United States, which have triggered volatility in global energy prices.
He noted that the increase in crude oil prices has transmitted severe cost pressures into domestic energy prices, transportation, logistics and manufacturing operations, stressing that inflation is currently being driven more by supply-side disruptions than by excess domestic demand.
“Monetary policy is a powerful stabilisation instrument, but it cannot repair supply chains, resolve geopolitical conflicts or eliminate structural bottlenecks in production and distribution,” the CPPE boss stated.
He warned that excessive monetary tightening at this stage could weaken productivity, constrain investment and undermine employment generation, arguing that economic growth depends more on productivity, enterprise and policy coherence than on high interest rates.
The CPPE also applauded the CBN for what it described as disciplined management of the monetary policy framework and the relative stability recorded in the foreign exchange market in recent months.
Yusuf said exchange rate stability had become a critical anchor for macroeconomic confidence, helping to moderate imported inflation, improve investor sentiment and reduce speculative activities in the market.
He further described the apex bank’s recent policy direction as a transition from “crisis management to confidence management,” which he said is essential for rebuilding investor trust in the Nigerian economy.
The organisation equally commended fiscal authorities for renewed efforts towards fiscal consolidation and improved revenue performance, noting that stronger fiscal discipline would help reduce deficits and dependence on debt financing.
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On the banking sector recapitalisation programme, the CPPE praised the CBN for ensuring a seamless implementation process without triggering depositor panic, systemic anxiety or shareholder uncertainty.
According to Yusuf, the recapitalisation exercise is aimed at strengthening the financial system to support industrialisation, infrastructure financing and long-term economic transformation.
He, however, urged the apex bank to sustain clear communication and continuous reassurance for banks still facing transitional recapitalisation issues in order to maintain public confidence in the financial system.
The CPPE maintained that the outcome of the 305th MPC meeting reflected a balanced policy approach designed not only to curb inflation but also to support investment, competitiveness, industrialisation and sustainable job creation in the country.
