In June, banks’ lending to the economy fell by 1.5% from May, dropping to N101.2 trillion. This decrease was noted in the Central Bank of Nigeria’s latest report.
The drop in lending was due to a 1.6% fall in credit to the private sector and a 1.2% decrease in credit to the government.
These declines reflect the CBN’s efforts to control rising inflation by increasing the benchmark interest rate and the cash reserve ratio for banks.
Despite criticism from the business community about high interest rates, analysts expect the CBN to continue increasing rates, though at a slower pace.
They project a moderate hike in the second half of the year, hoping to manage inflation without harming economic growth.
(Vanguard)