The Nigeria Employers’ Consultative Association (NECA) has commended the Central Bank of Nigeria (CBN) for reducing the Monetary Policy Rate (MPR) from 26.5 to 23 per cent.
The Director-General (D-G) of NECA, Mr Adewale-Smatt Oyerinde, commended CBN in a statement on Tuesday, describing the reduction as a significant adjustment after a prolonged period of tight monetary conditions.
Oyerinde, however, said that the association was still watchful of the decision, noting that a lower policy rate would not automatically translate into cheaper credit for businesses.
He said that the retention of the Cash Reserve Requirement (CRR) at 45 per cent for Deposit Money Banks indicated that monetary conditions remained relatively tight.
According to him, the reduction can, over time, support lower lending rates and improve access to working capital and investment financing, particularly for manufacturers and Small and Medium Enterprises (SMEs).
He said that the speed and extent of the transmission would depend on how banks adjusted their lending rates.
“August 2026 headline inflation at 15.39 per cent means that the new 23 per cent MPR remains above the prevailing inflation rate.
“The reduction therefore, represents a measured easing rather than a shift to broadly accommodative monetary policy,” NECA D-G said.
He also said the revised interest-rate corridor of plus 50 and minus 300 basis points placed the Standing Lending Facility at 23.5 per cent and the Standing Deposit Facility at 20 per cent.
Oyerinde said that the adjustment could support improved liquidity management and monetary policy transmission.
The NECA D-G said that the rate cut provided an opportunity for improved access to credit, but noted that the broader cost of doing business remained a concern.
He said that manufacturers and other businesses continued to contend with high input, energy, logistics and foreign exchange-related costs.
“NECA will, therefore, continue to monitor the transmission of the policy rate reduction to actual lending rates and advocate for a sustained and predictable path towards lower financing costs,” Ojerinde said.
He said that the reduction could also improve investor confidence around the gradual normalisation of monetary conditions.
Ojerinde, however, said that the retention of relatively high CRR levels showed that CBN remained attentive to liquidity and inflation considerations.
He described the rate cut as a good development but called for more pragmatic measures to ease the burden on manufacturers through further strategic support to enhance access to finance.
