On September 7, 2025, the Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, hinted that lending rates may be reduced soon as the country’s inflation rate continues to decline.
The statement, which came during the European Business Chamber (Eurocham Nigeria) C-Level Forum in Lagos on Saturday, has raised hopes for improved access to credit and stronger investment flows in the country.
According to a statement from the CBN, Governor Cardoso acknowledged that while inflation remains high, the sustained downward trend creates a “substantial potential” for a decrease in interest rates.
He explained that a future reduction in lending rates would naturally lead to stronger corporate lending and higher levels of investment, which is a key goal for the central bank. Cardoso also affirmed the CBN’s commitment to macroeconomic stability, a stronger banking sector, and positioning Nigeria as a top investment destination.
The governor’s remarks reflect a shift in the CBN’s monetary policy strategy. Throughout 2024, the apex bank adopted an aggressive tightening approach to combat soaring inflation and stabilize the Naira. The Monetary Policy Rate (MPR) was raised six consecutive times, from 18.75 per cent at the start of the year to a record-high 27.50 per cent by December.
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However, 2025 has marked a pause in this tightening cycle, with the CBN holding the rate at 27.50 per cent in its February, May, and July meetings.
The high-interest rate environment has been a significant burden for businesses, with a June 2025 Business Expectations Survey by the CBN revealing that high lending rates were the most severe constraint affecting businesses in Nigeria.
The Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona, had earlier warned that retaining the MPR at 27.5 per cent was a “depressing burden.” The next Monetary Policy Committee (MPC) meeting is scheduled for September 22 and 23, 2025, and market watchers are anticipating whether the CBN will begin to lower rates, signaling a new phase in its fight against inflation.
