CBN predicts decline in interest rates as inflation eases
Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has forecast a potential decline in interest rates, pointing to easing inflation and more efficient capital allocation as factors that could drive a more stable lending environment.
Speaking at the European Business Chamber (Eurocham Nigeria) C-Level Forum in Lagos, Cardoso noted that prevailing commercial lending rates, currently ranging between 32 per cent and 36 per cent, are likely to face downward pressure as macroeconomic conditions continue to improve.
“There is substantial potential for interest rates to decrease in the future,” he said during a fireside chat moderated by Andreas Voss, Chief Country Representative of Deutsche Bank Nigeria.
Cardoso outlined the CBN’s strategic priorities, which include sustaining macroeconomic stability, recapitalising banks, and positioning Nigeria as an attractive destination for both foreign and domestic investment.
He acknowledged that headline inflation remains elevated but stressed that it is gradually subsiding as a result of coordinated monetary and fiscal policies.
“It is decreasing as a consequence of collective efforts. It is anticipated that the advantages of the CBN tightening posture will persist. We will protect the stability that has been re-established in the financial system with the utmost zeal,” he stated.
On recapitalisation, Cardoso reaffirmed that the CBN’s directive for lenders to boost their minimum capital levels is fundamental to building resilient institutions capable of financing corporate lending and supporting economic growth.
He also stressed the role of technology-driven solutions in advancing financial inclusion, reducing poverty, and strengthening Nigeria’s fintech ecosystem.
Cardoso commended the growing cooperation between the CBN and fiscal authorities, including the Ministries of Finance, Industry, Trade and Investment, and the Budget Office, describing it as vital to sustaining ongoing reforms and securing long-term economic stability.