CBN Governor Hints at Lower Interest Rates as Inflation Eases

The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has suggested that the cost of borrowing money could soon become cheaper for Nigerians and businesses.

He said this is because the country’s high inflation is finally starting to slow down.

Cardoso shared this news at a meeting with European business leaders in Lagos on Saturday. He explained that as prices stop rising so quickly, there is a strong chance that banks will lower their lending rates.

“He stated that 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,” a CBN statement read.

He was also quoted as saying, “That is the environment in which stronger corporate lending and higher levels of investment will naturally follow.”

The CBN governor acknowledged that the current high cost of loans has been very difficult for businesses. He said the bank’s main focus has been to build confidence and make the financial system stronger after a period of instability.

“We will protect the stability that has been re-established in the financial system with the utmost zeal,” Cardoso stated. He added that their goal is to maintain this stability while continuing to fight inflation.

Cardoso also spoke about the ongoing plan to make Nigerian banks hold more capital, which he said is crucial for creating stronger institutions that can support economic growth. He highlighted that better coordination with the government’s finance and trade ministries is helping to sustain the country’s reforms.

This hint of future rate cuts comes after a very tough period of rising costs. Throughout 2024, the CBN increased its main interest rate six times in a row, pushing it to a record high of 27.5 per cent to try and control inflation and stabilise the Nigerian currency, the naira.

So far in 2025, the bank has paused these increases. A recent survey found that businesses now rank high interest rates as their single biggest problem, even worse than issues like insecurity or poor power supply.

The CBN’s next meeting to decide on interest rates is scheduled for 22-23 September. Many will be watching closely to see if the bank will finally begin to make borrowing more affordable.