CBN Interest Rate Cut a Timely Boost for Nigerian Economy

CBN Interest Rate Cut a Timely Boost for Nigerian Economy – CPPE

The Centre for the Promotion of Private Enterprise (CPPE) has commended the Central Bank of Nigeria (CBN) for its decision to cut the Monetary Policy Rate (MPR) by 50 basis points from 27.5 percent to 27 percent, describing it as a timely intervention for businesses and the wider economy.

The decision, announced at the conclusion of the Monetary Policy Committee (MPC) meeting on Tuesday, marks the first interest rate reduction in three years. The CBN explained that the move was influenced by Nigeria’s fifth consecutive month of disinflation and the need to stimulate economic growth.

In a statement, CPPE Chief Executive Officer, Muda Yusuf, said the cut is a logical step after months of tight monetary policies that had restored some macroeconomic stability. He noted that prolonged high interest rates in recent quarters had constrained private sector credit, increased the cost of funds, and slowed business expansion.

According to Yusuf, lowering the MPR and adjusting the Cash Reserve Ratio (CRR) will improve liquidity, reduce borrowing costs, and make financing more accessible, especially for small and medium-sized enterprises (SMEs).

“Lower cost of funds will encourage new investments, support business expansion, and enhance capacity utilisation in the real sector. This will ultimately stimulate output growth and job creation,” he said.

The CPPE added that the combination of a reduced MPR and CRR would expand banks’ capacity to extend credit, reinforce financial intermediation, and channel more resources into productive investments.

The CBN also introduced a 75 percent CRR on non-Treasury Single Account (TSA) public sector deposits to control excess liquidity while easing the lending environment.

With inflation moderating and reserves stabilising, analysts believe the move signals a cautious pivot towards growth while maintaining safeguards against inflationary risks