The Centre for the Promotion of Private Enterprise (CPPE) says the decision of the Central Bank of Nigeria (CBN) to retain all monetary policy parameters was expected. 

The Chief Executive Officer of CPPE, Dr Muda Yusuf, said this in an interview on Tuesday while reacting to the outcome of the 306th meeting of the Monetary Policy Committee (MPC). 

The MPC retained the monetary policy rate (MPR) at 26.50 per cent and left all other policy parameters unchanged.

Mr Yusuf said the CBN’s decision was in response to prevailing global economic uncertainties.

According to him, rising geopolitical tensions, particularly in the Middle East, had heightened inflationary risks through increasing global energy prices. 

He said the current global environment made it difficult for the CBN to consider easing monetary policy.

 “The global situation is very dicey. You can see the level at which oil prices are and the implication for inflation.

 “To the extent that we still have a crisis in the Middle East, it will not be easy to ease or relax interest rates,” he said.

Mr Yusuf said the apex bank was taking a cautious approach because of uncertainties in the global economy and concerns over the inflation outlook. 

He noted that rising energy prices remained a major inflationary risk, justifying the decision to maintain existing monetary policy settings. 

“The Central Bank is being cautious at this time because there are still a lot of uncertainties in the global economy.

“The inflationary outlook is not looking so good, especially because energy prices are rising. So, it is understandable that the CBN has held the rate,” he said. 

Asked whether the decision was commendable, Mr Yusuf said it was more appropriate to describe it as expected. 

“I will not use the word commendable. It is expected, given the prevailing geopolitical situation,” he said.

 (NAN)