CPPE commends CBN for pragmatic approach to Nigeria’s inflation management

THE Centre for the Promotion of Private Enterprise has praised the outcome of the 305th meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), describing the decision to retain all 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, Dr Muda Yusuf, said the committee’s decision to maintain the Monetary Policy Rate (MPR) at 26.5 percent demonstrated policy restraint and confidence in the direction of macroeconomic management amid growing global uncertainty.

The MPC also retained the asymmetric corridor around the MPR, while leaving the Cash Reserve Ratio (CRR) at 15 percent for merchant banks, 45 percent for deposit money banks and 75 percent for non-TSA deposits.

According to the CPPE, the current inflationary pressures facing Nigeria are largely structural and externally induced, rather than driven by excess domestic demand.

READ ALSO: CPPE warns CBN against excessive tightening ahead 305th MPC meeting

The organisation noted that rising geopolitical tensions involving Iran, Israel and the United States have intensified volatility in global energy markets, pushing up crude oil prices and increasing domestic costs linked to energy, transportation, logistics and manufacturing.

CPPE argued that while monetary policy remains an important stabilisation tool, aggressive tightening alone cannot resolve structural bottlenecks, repair supply chains or address geopolitical disruptions affecting inflation.

It warned that excessive monetary tightening could weaken productivity, discourage investment, slow industrial recovery and negatively impact job creation.

“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 statement noted.

The organisation also commended the CBN for maintaining relative stability in the foreign exchange (FX) market in recent months, describing exchange rate stability as a critical pillar of macroeconomic confidence.

According to CPPE, a more stable currency environment improves investor confidence, moderates imported inflation, enhances planning certainty and reduces speculative distortions within the market.

The group stated that the recent direction of monetary policy reflects a shift from crisis management to confidence management, which it described as essential for restoring investor trust and strengthening macroeconomic credibility.

CPPE also applauded fiscal authorities for renewed efforts toward fiscal consolidation and stronger revenue performance, stressing that long-term macroeconomic stability depends heavily on fiscal discipline, lower deficits and reduced reliance on debt financing.

Banking sector recapitalisation

On the banking sector recapitalisation programme, the organisation praised the seamless implementation process, noting that it has not triggered panic among depositors, bank failures or major disruptions within the financial system.

READ ALSO: Global oil price surge behind petrol price adjustments in Nigeria — CPPE

According to the group, the recapitalisation exercise represents more than a banking reform programme, describing it as a broader strategy aimed at strengthening financial intermediation to support industrialisation, infrastructure financing and long-term economic transformation.

However, CPPE urged the CBN to sustain effective communication with banks still facing recapitalisation-related transition issues in order to preserve depositor confidence and overall financial system stability.

The organisation maintained that the outcome of the 305th MPC meeting reflected balanced and intelligent policy calibration focused not only on controlling inflation, but also on supporting investment, productivity, industrialisation, competitiveness and sustainable job creation in the Nigerian economy.