THE Centre for the Promotion of Private Enterprises (CPPE) has urged the Central Bank of Nigeria (CBN) to stop increasing the benchmark interest rate to address rising inflation.

The CPPE Chief Executive Officer, Muda Yusuf, made the call in a statement on Wednesday, May 15 and suggested that the CBN adopt a more flexible monetary policy stance.

He said the apex bank’s monetary policy committee (MPC) needed to pause its monetary tightening measures despite the worsening inflation figure reported in April.

The call is pertinent to allow businesses recover from the shocks of the recent bullish rate hikes, while fiscal policy tools are addressed to tackle supply side factors in the inflation dynamics, said the Centre.

Nigeria’s headline inflation rate climbed to 33.69 per cent in April from 33.20 per cent in March, according to the National Bureau of Statistics (NBS) data on Wednesday, May 15.

Yusuf argued that the persistent inflationary pressures had been a cause for concern as it stoked households’ purchasing power and the operating costs for businesses.

The call opposed the CBN’s repeated stance in continuing to apply orthodox monetary policy measure in addressing the country’s surging inflation.

In a recent conversation, the CBN Governor, Olayemi Cardoso, said the apex bank’s orthodox policies would continue to be implemented to tame inflation.

There are already agitations that the apex bank would raise the benchmark interest rate when its committee meets next week, Monday and Tuesday, May 20 and 21.

According to the NBS, Nigeria’s inflation rose on a year-on-year basis by 11.47 per cent relative to 22.22 per cent in April 2023, but it slowed down on a month-on-month basis.

The statistics office stated that the headline inflation rate in April 2024 was 2.29 per cent, which was 0.73 per cent lower than the 3.02 per cent recorded in March 2024.

Despite the month-on-month decline, Yusuf said the key inflation drivers were yet to significantly moderate.

“These include the naira exchange rate, transportation costs, logistics challenges, insecurity in farming communities and structural bottlenecks to production.

“These are largely supply side issues which are being addressed by the fiscal authorities,” the CPPE boss said.

He, again, expressed worries that the apex bank had not yielded to the CPPE’s calls to put an exchange rate benchmark for the computation of import duty, which he argued had continued to be a significant concern to businesses and a major inflation driver.

“We again urge the Central Bank of Nigeria to peg the rate at between N800  and N1,000 per dollar to be reviewed quarterly.

“This is necessary to reduce the pass-through effect of heightening trade cost on inflation,” Yusuf said.

The CPPE boss had earlier requested the apex bank to adopt a quarterly framework starting at the rate of N1,000/$ to minimise volatility in the Customs duty exchange rate, suggesting that the adoption be carried out in line with the present administration’s commitment to bolstering investors’ confidence and driving economic growth.