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By Merit Ibe
The Centre for the Promotion of Private Enterprise has endorsed the decision of the Central Bank of Nigeria to retain key monetary policy parameters at its 305th Monetary Policy Committee (MPC) meeting, describing the move as a measured response to prevailing economic realities.
At the meeting, the MPC held the Monetary Policy Rate (MPR) at 26.5 percent, retained the asymmetric corridor around the rate, and maintained the Cash Reserve Ratio (CRR) at 15 percent for merchant banks, 45 percent for deposit money banks and 75 percent for non-TSA deposits.
In a statement on Wednesday, CPPE said the decision reflects “a pragmatic, measured and increasingly sophisticated understanding of the inflation dynamics currently confronting the Nigerian economy.”
The group argued that inflationary pressures are largely structural and externally driven, citing rising geopolitical tensions involving Iran, Israel and the United States, which have fueled volatility in global energy markets and pushed up domestic costs.
“Inflation at this time is being driven more by supply-side disruptions than by excess domestic demand,” the statement said.
According to CPPE, further tightening of monetary policy at this stage could prove counterproductive.
“Attempting to force down structural inflation solely through aggressive monetary tightening would amount to applying a monetary solution to a structural problem,” it noted, warning that excessive rate hikes could “suffocate productivity, weaken industrial recovery, constrain investment appetite and undermine employment generation.”
The think tank also commended the apex bank for stabilising the foreign exchange market in recent months, describing exchange rate stability as a critical anchor for investor confidence and economic planning.
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“Exchange rate stability has become one of the most important anchors of macroeconomic confidence in the economy,” CPPE said, adding that the CBN’s approach signals a shift “from crisis management to confidence management.”
The group further praised fiscal authorities for efforts at consolidation and improved revenue performance, stressing that sustained fiscal discipline remains key to long-term macroeconomic stability.
It also applauded the ongoing banking sector recapitalisation programme, noting that its implementation has been smooth and free of systemic shocks.
“Notably, the exercise has not triggered systemic anxiety, depositor panic, bank failures or significant erosion of shareholder confidence,” CPPE stated.
However, it urged the CBN to sustain clear communication with banks still navigating transitional challenges to preserve depositor confidence.
“Confidence remains the oxygen of the financial system,” the group added.
CPPE Chief Executive Officer, Muda Yusuf, said the MPC outcome reflects a balanced policy approach that prioritises not just inflation control, but also investment, productivity and job creation.
“The ultimate objective of macroeconomic management is not merely to tame inflation statistics, but to create an environment that supports investment, productivity, competitiveness, industrialisation and sustainable job creation,” he said.
