OPS Faults MPC Over 27.5% Interest Rate

The Organised Private Sector (OPS) has criticized the decision of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to retain the Monetary Policy Rate (MPR) at 27.5% for the second time this year.

This was announced by CBN Governor Olayemi Cardoso following the 300th MPC meeting in Abuja.

MPC’s Decision

At the press briefing, Cardoso stated that the committee unanimously agreed to keep the MPR at 27.5%, with the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks, while the Liquidity Ratio remains at 30%. He emphasized that this move allows policymakers to better assess ongoing economic developments.

Despite recent reports from the National Bureau of Statistics showing that headline inflation declined to 23.71% in April 2025, the MPC cited concerns over high electricity costs, foreign exchange volatility, and structural economic challenges.

OPS Criticism

Reacting to the decision, OPS Chairman Dele Oye voiced concerns that maintaining a high interest rate stifles business growth and discourages borrowing. He argued that businesses cannot operate profitably under the current conditions, warning that a high rate reduces consumer spending and affects key sectors like retail and services.

Similarly, the Association of Small Business Owners of Nigeria urged the CBN to consider a rate cut in future meetings to ease financial burdens on enterprises. Economic analysts believe that sustained interest rate hikes could slow investment and expansion efforts, despite inflation control measures.

The MPC will reconvene for its next policy meeting on July 21-22, 2025, where further adjustments may be considered depending on macroeconomic trends.