The Centre for the Promotion of Private Enterprise (CPPE) has praised the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) for deciding to pause interest rate hikes. Muda Yusuf, the CEO of CPPE, offered the commendation in an interview with newsmen on Friday in Lagos.
While welcoming the CBN’s decision to maintain rates, Yusuf called for future reductions and raised concerns about the Cash Reserve Ratio (CRR) rates. He noted that the CBN’s move to pause rate hikes was in line with the centre’s expectations, especially considering the recently revised inflation rate calculation, which showed a decline to 24.48 percent—currently lower than the monetary policy rate.
Yusuf stated, “It makes sense to retain the rates so that we don’t further increase the burden of high interest rates on businesses and individuals exposed to banks.” However, he emphasized the need for a shift toward easing tightening measures, suggesting that the rates should begin to moderate going forward.
He expressed dissatisfaction with the current situation where the Monetary Policy Rate (MPR) exceeds the inflation rate, arguing that it places undue pressure on investors in the economy. Yusuf called on the CBN to consider a gradual reduction of the MPR and relaxation of the CRR in the upcoming MPC meeting in May.
He also noted positive signs in the economy, pointing out that prices of essential goods like energy, diesel, PMS, and pharmaceuticals were beginning to fall. According to him, stabilizing the exchange rate could further contribute to price reductions in other sectors.
Yusuf concluded with optimism about the inflation outlook but reiterated concerns over the CRR, which he pointed out is the highest globally at 50 percent. He advised the CBN committee to reconsider its stance on tightening measures moving forward.
