Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has indicated that lending rates in the country could decline once inflation moderates and market efficiency improves.
Speaking at the European Business Chamber (Eurocham Nigeria) C-Level Forum in Lagos, Cardoso acknowledged concerns that high interest rates have constrained investment. However, he emphasised that monetary tightening was necessary to stabilise the economy.
“There is substantial potential for interest rates to decrease in the future as inflation continues to decline and as markets become more efficient in allocating capital,” Cardoso said. “That is the environment in which stronger corporate lending and higher levels of investment will naturally follow.”
The CBN governor noted that the apex bank’s recent sharp rate hikes, aimed at reining inflation and stabilising the naira, are already showing positive results. He stressed that the central bank’s priority remains to “protect the stability that has been re-established in the financial system,” while ensuring banks remain resilient.
On Nigeria’s position in the global economy, the CBN boss said, “Nigeria is a market that is both large and appealing in its own right, and it is also situated at the entrance to the broader continent and West Africa”.
“This underscores the importance of maintaining stability at home,” he added.
Melissa Enoch
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