The Centre for the Promotion of Private Enterprise (CPPE) has commended the outcome of the 305th Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN), describing the decision to retain key monetary policy parameters as a major boost for economic stability, investor confidence and private sector growth.
In a statement issued by the Chief Executive Officer of CPPE, Dr. Muda Yusuf, the economic think tank said the decision to retain the Monetary Policy Rate (MPR) at 26.5 per cent reflects a balanced and pragmatic approach to managing Nigeria’s current economic realities, especially amid rising global geopolitical tensions and persistent domestic cost pressures.
According to the CPPE, the decision signals a shift towards more strategic and intelligent macroeconomic management, particularly as inflationary pressures in Nigeria remain largely driven by structural and supply-side factors rather than excessive consumer demand.
“The MPC’s decision demonstrates a commendable understanding that the current inflationary pressures are substantially structural and externally induced. Inflation at this time is being driven more by supply-side disruptions than by excess domestic demand,” the statement said.
The organisation noted that escalating geopolitical tensions involving Iran, Israel and the United States have intensified volatility in the global oil market, resulting in higher crude oil prices and increased domestic costs for transportation, logistics, manufacturing and energy.
CPPE stressed that while monetary policy remains an important stabilisation tool, aggressive tightening alone cannot resolve structural challenges such as energy costs, supply chain disruptions, infrastructure deficits and logistics inefficiencies.
“Attempting to force down structural inflation solely through aggressive monetary tightening would amount to applying a monetary solution to a structural problem,” the statement added.
The economic policy group further stated that maintaining the current rate environment would help preserve productivity, support industrial recovery, sustain investment appetite and protect employment generation at a time when businesses are already grappling with elevated operating costs.
According to the CPPE, economies grow through productivity, enterprise and investment confidence, rather than excessively high interest rates.
The organisation also praised the Central Bank for maintaining relative stability in the foreign exchange market in recent months, noting that exchange rate stability has become a critical anchor for macroeconomic confidence.
“A stable currency environment improves investor sentiment, moderates imported inflation, enhances planning predictability and reduces speculative distortions within the market,” the statement noted.
CPPE added that the current direction of monetary policy suggests a transition from crisis management to confidence management, which it described as critical for restoring investor trust and rebuilding macroeconomic credibility in Nigeria.
The think tank equally commended the Federal Government’s ongoing fiscal consolidation efforts and improving revenue performance, stressing that sustainable macroeconomic stability depends significantly on fiscal discipline and prudent public finance management.
On the banking sector recapitalisation programme, CPPE applauded the seamless implementation process, noting that the exercise has so far avoided systemic panic, depositor anxiety and major disruptions within the financial system.
According to the organisation, the recapitalisation exercise should be viewed beyond banking reform, but as a long-term strategy for strengthening financial intermediation, industrial financing and economic transformation.
“The recapitalisation programme is fundamentally a strategy for building a stronger financial system capable of supporting long-term industrialisation, infrastructure financing and economic transformation,” CPPE stated.
However, the group urged the Central Bank to sustain clear communication and continuous engagement with the public and financial institutions, particularly for banks still dealing with transitional recapitalisation challenges.
“Confidence remains the oxygen of the financial system,” the statement emphasised.
CPPE concluded that the outcome of the 305th MPC meeting reflects a carefully calibrated policy approach designed not only to manage inflation, but also to support investment, competitiveness, industrial growth and sustainable job creation within the Nigerian economy.
