The Centre for the Promotion of Private Enterprise (CPPE) has described the Central Bank of Nigeria’s (CBN) recent interest rate cut as a timely intervention for Nigerian businesses and the economy.

In a statement on Tuesday, CPPE’s Chief Executive Officer, Muda Yusuf, welcomed the Monetary Policy Committee’s decision to lower the Monetary Policy Rate (MPR) by 50 basis points, from 27.5% to 27%.

The CBN had justified the move — the first interest rate cut in three years — on the back of five consecutive months of disinflation in the country.

According to CPPE, the shift marks a logical pivot towards growth after months of efforts to restore macroeconomic stability and slow inflationary pressures.

The think tank noted that previously high interest rates had restricted private sector credit, increased the cost of funds, and constrained business expansion.

By easing both the MPR and Cash Reserve Ratio (CRR), CPPE argued, the CBN is deliberately working to improve liquidity conditions, reduce borrowing costs, and unlock capital for productive sectors of the economy.

“The combination of lower MPR and reduced CRR should expand banks’ capacity to create credit, lowering lending rates and making financing more accessible for businesses, especially SMEs,” the group stated.

It added that lower borrowing costs will encourage new investments, business expansion, and improved capacity utilisation in the real sector, which would ultimately boost output growth and job creation.

CPPE also highlighted that a more accommodative monetary environment will strengthen financial intermediation, enabling banks to mobilise savings and channel them into productive investments, thereby reinforcing financial deepening and economic growth.