The Centre for the Promotion of Private Enterprise (CPPE) has endorsed the Central Bank of Nigeria’s (CBN) decision to retain all key monetary policy parameters at the conclusion of the 305th Monetary Policy Committee (MPC) meeting, describing the move as pragmatic and well-suited to Nigeria’s current economic realities.
In a policy statement issued after the MPC meeting, the CPPE said the decision reflects a more balanced and informed understanding of the factors driving inflation in the country.
At the meeting, the MPC retained the Monetary Policy Rate (MPR) at 26.5 per cent and left all other key policy parameters unchanged. The Cash Reserve Ratio (CRR) was maintained at 45 per cent for deposit money banks, 15 per cent for merchant banks, and 75 per cent for non-Treasury Single Account (TSA) public sector deposits. The asymmetric corridor around the MPR was also retained.
According to the CPPE, the decision demonstrates policy maturity and strategic restraint at a time when the global economy is facing heightened uncertainty arising from geopolitical tensions and market volatility.
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The centre noted that the ongoing tensions involving Iran, Israel and the United States have contributed to instability in global energy markets, leading to higher crude oil prices and increasing production costs across transportation, logistics and manufacturing sectors.
“The decision to hold rates demonstrates a commendable recognition that excessive tightening at this stage could suffocate productivity, weaken industrial recovery, constrain investment appetite and undermine employment generation,” the CPPE stated.
“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 organisation argued that inflationary pressures in Nigeria are largely driven by supply-side constraints rather than excessive consumer demand, adding that monetary policy alone cannot resolve structural bottlenecks, repair disrupted supply chains or address geopolitical factors influencing prices.
According to the CPPE, a further increase in interest rates could have adversely affected investment flows and slowed the pace of economic recovery.
The MPC, however, explained that its decision to retain rates was informed by persistent inflationary pressures and the need to preserve macroeconomic stability. The committee cited the consecutive rise in inflation recorded in March and April 2026 as a key factor behind its cautious stance.
The CPPE also commended the CBN for maintaining relative stability in the foreign exchange market, describing exchange rate stability as a critical pillar of investor confidence and macroeconomic resilience.
“A stable currency environment improves investor sentiment, moderates imported inflation, enhances planning predictability and reduces speculative distortions within the market,” the group said.
It added that the apex bank’s recent policy direction signals a shift from crisis management to confidence management, a transition it described as essential for restoring macroeconomic credibility and rebuilding investor trust.
The centre further praised fiscal authorities for ongoing efforts toward fiscal consolidation and improved revenue generation, noting that stronger fiscal discipline complements monetary policy objectives.
CPPE also lauded the implementation of the banking sector recapitalisation programme, observing that the exercise has progressed without triggering systemic panic, depositor anxiety or significant shareholder losses.
According to the organisation, the recapitalisation initiative is part of a broader strategy to strengthen financial intermediation and position the banking sector to support industrialisation, infrastructure development and long-term economic transformation.
It nevertheless urged the CBN to sustain clear communication with the few banks still navigating recapitalisation-related transition challenges in order to preserve depositor confidence and maintain financial system stability.
Beyond the interest rate decision, the CPPE welcomed the improvement in Nigeria’s external reserves, which rose to $49.49 billion as of May 15, 2026, from $48.35 billion at the end of March.
CBN Governor, Olayemi Cardoso, said the reserve level is sufficient to cover more than nine months of imports of goods and services, providing a strong buffer against external shocks.
According to Cardoso, the healthy reserve position continues to bolster investor confidence and support exchange rate stability, reinforcing the gains recorded from ongoing foreign exchange reforms and broader macroeconomic management efforts.
