CBN Governor hints at possible interest rate cuts as inflation slows, raising hopes for improved lending and stronger investments
CBN Governor Olayemi Cardoso has suggested that Nigeria may soon see a reduction in lending rates, offering renewed optimism for businesses and investors.
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Speaking at the Eurocham Nigeria C-Level Forum in Lagos, Cardoso said easing inflation could create room for lower rates, boosting credit access and economic activity.
In a statement released by the Central Bank of Nigeria (CBN) on Sunday, the CBN Governor reaffirmed the Bank’s commitment to macroeconomic stability and a resilient financial sector.
While inflation remains high, Cardoso said the trend has started to reverse — a necessary step before any rate cut can be considered.
“There is substantial potential for interest rates to decrease in the future as inflation continues to decline,” Cardoso noted.
This positive sentiment comes after a year of aggressive monetary tightening.
The CBN raised the benchmark interest rate six times in 2024, bringing the Monetary Policy Rate (MPR) to a record 27.5% to curb inflation and support the naira.
So far in 2025, the Bank has paused further hikes, keeping rates steady at its three policy meetings.
Businesses, however, continue to feel the pinch. According to the CBN’s June 2025 Business Expectations Survey, high interest rates are now the top constraint for firms across Nigeria, ahead of even power shortages and insecurity.
The Lagos Chamber of Commerce and Industry has called the current MPR “a depressing burden.”
Cardoso acknowledged the strain but emphasized that restoring confidence and maintaining financial stability remains the Bank’s top priority.
“We will protect the stability that has been re-established in the financial system with the utmost zeal,” he stated.
The CBN Governor also provided an update on the ongoing bank recapitalization initiative.
He described it as vital for building stronger institutions capable of withstanding shocks and expanding access to corporate lending.
Beyond macroeconomic policy, Cardoso emphasized the role of financial inclusion and technology.
The Bank aims to expand fintech access to close financing gaps, reduce poverty, and support innovation-driven growth.
He also highlighted improved coordination with fiscal authorities, calling it essential for sustaining reforms.
Closer collaboration with the Ministries of Finance, Trade, and the Budget Office is expected to improve long-term economic stability.
On Nigeria’s strategic role in the region, Cardoso stressed that maintaining internal stability is key to unlocking the country’s broader regional potential.
“Nigeria is a market that is both large and appealing in its own right… situated at the entrance to the broader continent and West Africa,” the Governor noted.
The next Monetary Policy Committee meeting, scheduled for September 22–23, could offer more clues on the path forward.
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Analysts are watching closely to see whether the Bank will maintain its pause — or finally pivot toward easing policy in light of declining inflation.
Source: Read more at punchng.com
David Okere is a journalist and contributor to Freelanews.com, covering business, governance, public affairs, and human-interest stories with a commitment to accuracy, balance, and public interest reporting.
