The Centre for the Promotion of Private Enterprise (CPPE) has welcomed the Central Bank of Nigeria’s decision to cut the Monetary Policy Rate (MPR) by 350 basis points from 26.5 per cent to 23 per cent, describing it as a significant recalibration of the country’s monetary policy framework.
The reduction was announced by the Monetary Policy Committee (MPC) at its 307th meeting held on September 22, 2026.
In a policy brief signed by its Chief Executive Officer, Dr Muda Yusuf, the CPPE said the decision marked an important shift from the prolonged restrictive monetary policy regime and could support investment, economic growth and recovery.
The business group also welcomed the adjustment of the asymmetric corridor around the MPR from +50/-450 basis points to +50/-300 basis points.
According to CPPE, the rate cut was timely given the improving inflation trajectory and the rising cost of maintaining a tight monetary environment.
It noted that the previous MPR of 26.5 per cent had become increasingly misaligned with inflation of about 15.4 per cent and prevailing money-market rates of around 20 per cent, weakening the signalling function of the policy rate.
CPPE said reducing the MPR to 23 per cent would help realign monetary policy with prevailing macroeconomic and financial-market conditions.
The group said the decision could provide relief to businesses, particularly those in manufacturing, agriculture, construction, logistics and other sectors facing high financing costs.
It, however, stressed that the impact of the rate cut would depend largely on effective transmission to the real economy.
“Lending rates on both new and existing facilities should progressively adjust downwards,” CPPE said, warning that without meaningful transmission to borrowers, the impact on investment and economic growth would remain limited.
The organisation also highlighted the potential fiscal benefits of lower interest rates, saying a sustained moderation in yields could reduce the cost of government borrowing and ease the Federal Government’s domestic debt-service burden.
It said this could create additional fiscal space for infrastructure, security, education, healthcare and other development priorities.
On the foreign exchange market, CPPE acknowledged that the magnitude of the rate cut could create risks, particularly as some major central banks maintain tighter monetary positions.
It said lower interest-rate differentials could affect the attractiveness of naira-denominated assets and potentially trigger portfolio outflows and pressure on the foreign exchange market.
However, CPPE noted that Nigeria was entering the policy transition with improved foreign reserves, greater exchange-rate stability and stronger external-sector buffers, giving the CBN more room to manage the risks.
It urged the apex bank to remain vigilant and deploy appropriate monetary instruments, including open-market operations, to contain excessive volatility and preserve exchange-rate stability.
The group also cautioned that monetary easing alone would not be sufficient to deliver sustainable economic recovery.
It called for complementary fiscal and structural reforms to address energy costs, logistics bottlenecks, insecurity, food-production constraints, infrastructure deficits and high regulatory costs.
CPPE said such measures were necessary to ensure that lower interest rates translate into increased investment and output rather than renewed inflationary pressures.
The organisation described the September MPC decision as a significant turning point in Nigeria’s monetary policy cycle, but said its effectiveness should ultimately be reflected in lower commercial lending rates, stronger private-sector investment and productive-sector credit, controlled inflation and sustained foreign-exchange stability.
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