MPC meeting: CUPPE backs CBN’s retention of 27.5% lending rate

…Says hiking rates not an option

COMFORT EKELEME, Business Editor

Centre for the Promotion of Private Enterprise (CPPE) has commended the decision of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to pause the tightening of rates, saying hiking rates was really not an option.

In a chat with Daily Champion, Chief Executive Officer of CPPE, Dr. Muda Yusuf said holding rates in the context of lingering uncertainty in the global economy triggered by disruptive tariff regimes and geopolitical dynamics is understandable.

He said, CPPE welcomes the decision of the Monetary Policy Committee to pause the tightening of rates.
“The CPPE is concerned that both the Cash Reserve Ratio (CRR) and the Monetary Policy Rate (MPR) rate were already very high, creating difficult financing conditions for investors in the real economy.

“However, fiscal and monetary policy coordination remains a critical imperative for macroeconomic stability,” he said.
Meanwhile, the MPCon  Tuesday retained the MPR at 27.50 per cent, thus making it the second consecutive time in 2025.

The decision was announced by the CBN Governor, Yemi Cardoso, following the Committee’s 300th meeting which ended today in Abuja.

The Committee equally retained the asymmetric corridor at +500/-100 basis points as well as the Cash Reserve Ratio of Deposit Money Banks at 50.00 per cent, that of Merchant Banks at 16 per cent and Liquidity Ratio at 30.00 per cent.

The Committee reviewed developments in the global and domestic economies, including the risks to the outlook.

All twelve members of the Committee were in attendance and were unanimous in its decision to hold policy.
The MPC noted the relative improvements in some key macroeconomic indicators, which are expected to support the overall moderation in prices in the near to medium term.

These include the progressive narrowing of the gap between the Nigerian Foreign Exchange Market (NFEM) and Bureau De Change (BDC) windows, the positive balance of payments position, and easing
price of PMS.

Members also noted with satisfaction the progressive moderation in food inflation and, therefore, commended the government for implementing measures to increase food supply as well as stepping up the fight against insecurity, especially in farming communities.

The MPC, thus, encouraged security agencies to sustain the momentum while the government provides necessary inputs to farmers to further boost food production.

The Committee, however, acknowledged underlying inflationary pressures driven largely by high electricity prices, persistent foreign exchange demand pressure and other legacy structural factors.

The MPC noted new policies introduced by the Federal Government to boost local production, reduce
foreign currency demand pressure, and thus, lessen the pass-through to domestic prices.

Given the relative stability observed in the foreign exchange market, members urged the Bank to sustain the implementation of the ongoing reforms to further boost market confidence.

The Committee also called on the fiscal authority to strengthen current efforts at enhancing foreign exchange earnings, especially from gas, oil and non-oil exports.

The MPC, however, expressed concerns about the recent decline in crude oil prices, attributable to increased production by non-OPEC members.