Substantial potential for interest rates to decrease – CBN Governor
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has signaled that lending rates may decrease in the coming months as inflation continues to ease. This news raises hopes for improved access to credit and stronger investment flows in the economy.
Speaking at the European Business Chamber (Eurocham Nigeria) C-Level Forum in Lagos, Cardoso stated, “There is a substantial potential for interest rates to decrease in the future as inflation continues to decline and as markets become more efficient in allocating capital.” He added that this environment would naturally lead to “stronger corporate lending and higher levels of investment.”
The CBN governor acknowledged that high lending rates have been a burden on businesses, a point echoed by the Lagos Chamber of Commerce and Industry, whose Director-General, Dr. Chinyere Almona, previously warned that the current 27.5% Monetary Policy Rate (MPR) is a “depressing burden on businesses.”
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The CBN’s focus remains on restoring confidence and stability. “We will protect the stability that has been re-established in the financial system with the utmost zeal,” Cardoso stated. “Our primary objective is to maintain that stability while simultaneously addressing inflation and ensuring that the financial system is sufficiently resilient to facilitate corporate lending and investment.”
Cardoso also highlighted the ongoing bank recapitalization as crucial for creating stronger institutions that can withstand shocks and finance broader economic growth. He also emphasised the importance of technology-driven solutions and financial inclusion, as well as improved coordination with fiscal authorities to sustain reforms.
The CBN governor’s comments come after a year of aggressive monetary tightening in 2024, during which the central bank raised the MPR from 18.75% to its highest-ever level of 27.50%. This year, the CBN has paused the hikes, holding the rate steady at its last three meetings.
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The next Monetary Policy Committee meeting, scheduled for September 22 and 23, 2025, is highly anticipated by market observers for further signals on the future direction of monetary policy.
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