- Policy Maturity! CPPE Applauds CBN For Holding Rates Amid Global Tensions
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR), which benchmarks interest rates in the country, at 26.5 per cent.
The MPC also retained the asymmetric corridor around the MPR at +50/-450 basis points.
The committee further retained the Cash Reserve Ratio (CRR) for deposit money banks at 45 per cent, merchant banks at 16 per cent, and non-TSA public sector deposits at 75 per cent.
Olayemi Cardoso, governor of the apex bank, announced this on Wednesday at the end of the committee’s 305th meeting in Abuja.
Cardoso said all 11 members of the committee attended the meeting, where they reviewed recent developments in the global and domestic economies and assessed the near- to medium-term outlook.
He said the MPC’s decisions were “anchored on a comprehensive assessment of risks to the outlook”.
On April 15, the National Bureau of Statistics (NBS) said Nigeria’s headline inflation rate has increased to 15.38 per cent in March 2026 — up from the 15.06 per cent in February.
But according to the CBN governor, although inflation has increased marginally for two consecutive months, the committee believes the trend is temporal and largely caused by external shocks.
“The MPC recognises its transitory nature and remains confident that the current macroeconomic environment is sufficiently robust to support a return to disinflation,” Cardoso said.
Speaking on the factors influencing the committee’s decision, the CBN governor said members noted the spillovers from the Middle East crisis, which have placed upward pressure on energy prices, transportation costs, and logistics globally.
“However, indications are that the impact of the crisis on the Nigerian economy has been minimal due to the benefits of prior policy reforms,” he said.
“These include exchange rate stability, improvements in external reserve buffers, strengthened monetary policy transmission, well-capitalised banking system, and ongoing fiscal consolidation, which have significantly bolstered the economy’s ability to absorb external shocks.”
Cardoso said the reforms have helped moderate the transmission of global price pressures into the domestic economy.
“As a result, the pass-through of global commodity and energy price shocks to domestic inflation has been significantly mitigated and would have been more pronounced in the absence of these reforms,” the CBN governor said.
“The MPC was therefore convinced that the essential conditions for price stability remain firmly in place.”
He also said the committee welcomed Nigeria’s recent sovereign rating upgrade despite prevailing external headwinds.
“This further underscores the strength of the country’s macroeconomic fundamentals and reinforces confidence in its reform trajectory and policy credibility,” Cardoso said.
According to the apex bank chief, members of the committee agreed that maintaining a cautious policy stance remains necessary to keep inflation expectations under control and sustain macroeconomic stability.
“Members were therefore of the view that a cautious and vigilant policy stance is necessary to anchor inflation expectations and safeguard macroeconomic stability,” he said.
Cardoso also said the committee noted “with satisfaction” the successful conclusion of the banking recapitalisation exercise.
Reacting to the decision, the Centre for the Promotion of Private Enterprise (CPPE) threw its weight behind the outcome of the meeting, describing the decision to retain key monetary policy parameters as a “pragmatic” and “intelligent policy calibration” in the face of mounting global economic uncertainty.
In a statement issued Wednesday, CPPE Chief Executive Officer, Muda Yusuf, praised the apex bank for resisting further monetary tightening despite rising inflationary pressures and geopolitical shocks rocking the global economy.
The MPC had retained the Monetary Policy Rate (MPR) at 26.5 percent, while also maintaining the asymmetric corridor around the MPR, the Cash Reserve Ratio (CRR) at 15 percent for merchant banks, 45 percent for deposit money banks, and 75 percent for non-TSA deposits.
According to Yusuf, the MPC’s stance reflects “a pragmatic, measured and increasingly sophisticated understanding of the inflation dynamics currently confronting the Nigerian economy.”
“At a time of heightened global uncertainty and mounting geopolitical tensions, the decision of the MPC sends a powerful signal of policy maturity, strategic restraint and confidence in the direction of macroeconomic management,” he stated.
The CPPE boss argued that Nigeria’s inflation crisis is being driven largely by structural and external factors rather than excessive domestic demand, warning that aggressive monetary tightening could cripple productivity and derail economic recovery.
“The intensifying geopolitical tensions involving Iran, Israel and the United States have triggered fresh volatility in the global energy market, pushing up crude oil prices and transmitting severe cost pressures into domestic energy prices, transportation, logistics and manufacturing operations,” Yusuf said.
“Inflation at this time is being driven more by supply-side disruptions than by excess domestic demand.”
He maintained that while monetary policy remains a powerful stabilisation tool, it cannot solve structural bottlenecks or international geopolitical conflicts.
“Attempting to force down structural inflation solely through aggressive monetary tightening would amount to applying a monetary solution to a structural problem,” he warned.
Yusuf further cautioned that excessive tightening could “suffocate productivity, weaken industrial recovery, constrain investment appetite and undermine employment generation.”
“Economies do not grow on the strength of high interest rates; they grow on the strength of productivity, enterprise, investment confidence and policy coherence,” he declared.
The CPPE also commended the CBN for what it described as disciplined management of the monetary policy framework and improved stability in the foreign exchange market.
“Exchange rate stability has become one of the most important anchors of macroeconomic confidence in the economy,” Yusuf noted.
“A stable currency environment improves investor sentiment, moderates imported inflation, enhances planning predictability and reduces speculative distortions within the market.”
He added that recent policy moves by the apex bank indicate a transition “from crisis management to confidence management,” which he said is critical to rebuilding investor trust in the Nigerian economy.
The organisation also praised fiscal authorities for renewed efforts at fiscal consolidation and stronger revenue performance, stressing that sustainable macroeconomic stability depends heavily on fiscal discipline.
On the ongoing banking sector recapitalisation programme, the CPPE described the process as “seamless and non-disruptive,” noting that it has not triggered depositor panic, systemic instability or erosion of shareholder confidence.
“The recapitalisation programme is not merely a banking reform exercise; it is fundamentally a strategy for building a stronger financial intermediation framework capable of supporting long-term industrialisation, infrastructure financing and economic transformation,” Yusuf stated.
“Strong economies are built on strong financial systems.”
However, the CPPE urged the CBN to sustain clear communication with banks still facing recapitalisation-related transition challenges in order to preserve public confidence in the financial system.
“Confidence remains the oxygen of the financial system,” Yusuf stressed.
The economic think tank concluded that the outcome of the 305th MPC meeting demonstrates a balanced policy direction focused not just on curbing inflation, but on creating conditions that support investment, industrialisation, competitiveness and sustainable job creation in Nigeria.
