Think tank says MPC’s cautious stance reflects deeper understanding of inflation drivers and protects investment, jobs, and economic recovery…..
The Centre for the Promotion of Private Enterprise (CPPE) has commended the Central Bank of Nigeria (CBN) for retaining all key monetary policy parameters at the conclusion of the 305th meeting of the Monetary Policy Committee (MPC).
In a statement issued on May 20, 2026, and signed by its Chief Executive Officer, Muda Yusuf, the economic policy think tank described the MPC’s decision as pragmatic, balanced, and reflective of a more strategic understanding of the country’s inflation realities.
At the meeting, the MPC retained the Monetary Policy Rate (MPR) at 26.5 percent while also maintaining the asymmetric corridor around the benchmark rate.
The committee equally retained the Cash Reserve Ratio (CRR) at 45 percent for deposit money banks, 15 percent for merchant banks, and 75 percent for non-TSA public sector deposits.
Reacting to the outcome, CPPE said the decision demonstrates policy restraint and maturity at a time of heightened geopolitical tensions and growing uncertainty within the global economy.
According to the organisation, current inflationary pressures in Nigeria are being driven largely by structural and external factors rather than excessive domestic demand.
The group specifically pointed to escalating tensions involving Iran, Israel, and the United States, noting that the crisis has triggered renewed volatility in the global oil market.
CPPE explained that rising crude oil prices have continued to transmit higher energy, transportation, logistics, and manufacturing costs into economies around the world, including Nigeria.
The organisation argued that inflation in the current environment is primarily supply-driven and therefore cannot be fully addressed through aggressive monetary tightening alone.
While acknowledging the importance of monetary policy as a stabilisation tool, CPPE maintained that interest rate hikes cannot solve structural bottlenecks, repair supply chain disruptions, or resolve geopolitical conflicts driving global inflationary pressures.
It warned that excessive tightening at this stage could hurt productivity, weaken industrial recovery, discourage private sector investment, and negatively impact job creation.
The think tank also praised the Central Bank for sustaining relative stability in the foreign exchange market in recent months, describing exchange rate stability as one of the most important anchors for macroeconomic confidence.
According to CPPE, a more stable naira environment helps moderate imported inflation, supports business planning, and improves investor sentiment.
The organisation further acknowledged ongoing fiscal consolidation efforts by government authorities, stating that stronger fiscal discipline remains essential for long-term macroeconomic stability.
CPPE also applauded the implementation of the banking sector recapitalisation programme, describing the process as smooth, orderly, and non-disruptive.
According to the group, the exercise has so far avoided major disruptions such as depositor panic, banking distress, or significant erosion of shareholder confidence, developments it attributed to stronger regulatory oversight and improved supervision by the Central Bank.
However, the organisation advised the apex bank to maintain clear communication and sustained engagement with financial institutions still navigating recapitalisation-related adjustments in order to preserve confidence within the banking system.
CPPE concluded that the outcome of the latest MPC meeting reflects a more balanced policy approach that not only prioritises inflation control but also considers broader economic goals including investment growth, industrialisation, competitiveness, productivity, and sustainable job creation.
