The Centre for the Promotion of Private Enterprise has praised the Central Bank of Nigeria for retaining key monetary policy parameters at the 305th Monetary Policy Committee meeting.

CPPE chief executive officer Muda Yusuf, in a statement on Wednesday, described the decision as pragmatic and reflective of prevailing inflationary realities confronting the Nigerian economy.

The MPC retained the Monetary Policy Rate at 26.5 per cent during its latest policy meeting held in Abuja.

The committee also retained the cash reserve ratio at 15 per cent for merchant banks and 45 per cent for deposit money banks.

It further retained the CRR for non-Treasury Single Account deposits at 75 per cent, maintaining existing monetary tightening measures.

Mr Yusuf said the MPC decision demonstrated policy maturity and strategic restraint amid growing global uncertainty and rising geopolitical tensions affecting international markets.

According to him, Nigeria’s inflationary pressures remain largely structural and externally induced rather than purely monetary in nature.

He noted that supply-side disruptions and volatility in global oil prices, linked to tensions involving the United States, Israel and Iran, worsened inflationary pressures.

“Attempting to force down structural inflation solely through aggressive monetary tightening would amount to applying a monetary solution to a structural problem,” Mr Yusuf said.

He warned that further tightening measures could suppress productivity and weaken the country’s industrial recovery efforts at a critical economic period.

Mr Yusuf added that excessive tightening could discourage private investment, reduce business confidence and undermine sustainable job creation across productive sectors.

The CPPE boss also commended the CBN for strengthening discipline in monetary management and sustaining relative stability within the foreign exchange market. According to him, exchange rate stability has emerged as a major anchor for macroeconomic confidence and improved investor sentiment in the economy.

Mr Yusuf explained that the stable exchange rate environment had helped moderate imported inflation and improve planning by businesses and investors. Yusuf further said exchange rate stability had reduced market distortions and contributed to better predictability in commercial and industrial operations nationwide.

He stated that the apex bank’s recent policy direction signalled a transition from crisis management to confidence management in economic governance. According to him, restoring investor confidence remains essential for attracting long-term capital and stimulating broader economic growth and industrial expansion.

Mr Yusuf also praised the federal government for renewed commitment toward fiscal consolidation and improved revenue generation performance. He applauded the smooth implementation of the banking sector recapitalisation programme introduced by the CBN to strengthen financial institutions. According to him, the exercise had not triggered depositor panic, bank failures or any significant erosion of shareholder confidence within the banking sector.

Mr Yusuf said the recapitalisation programme would enhance the banking sector’s capacity to finance industrialisation, infrastructure development and long-term economic transformation. He, however, urged the CBN to sustain clear communication with banks still addressing recapitalisation-related concerns and compliance requirements.

He noted that consistent engagement with stakeholders would help preserve depositor confidence and maintain stability across the nation’s financial system.

The CPPE chief noted that the outcome of the 305th MPC meeting reflected a balanced policy approach designed to support investment, competitiveness and sustainable employment generation. He also mentioned that the policy stance would encourage productivity growth, industrialisation and broader economic resilience amid challenging global economic conditions.

(NAN)