CBN Governor Cardoso Hints at Interest Rate Cuts as Inflation Eases and Investor Confidence Rises
Nigeria’s Central Bank governor, Olayemi Cardoso, has indicated that interest rates could soon fall as inflation shows signs of cooling and capital inflows strengthen. Speaking at the Eurocham Nigeria C-Level Forum in Lagos, Cardoso suggested that the Central Bank of Nigeria’s (CBN) cycle of aggressive monetary tightening may be nearing its end, offering businesses and investors renewed optimism for a more stable financial environment.
Cardoso highlighted that Nigeria is entering a new phase of macroeconomic stability, supported by banking sector reforms and stronger investor confidence. “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,” he noted during a discussion with Andreas Voss, chief country representative of Deutsche Bank Nigeria. According to him, such an environment would pave the way for stronger corporate lending and higher levels of investment.
The CBN has hiked its benchmark interest rate multiple times since 2023 to curb soaring inflation and stabilize the naira. Although inflation remains relatively high, recent figures show a gradual decline, helped by tighter monetary policies and measures aimed at supporting currency stability. Cardoso emphasized that the bank is determined to safeguard recent gains, while ensuring that Nigerian banks remain resilient enough to provide financing for long-term growth.
He further pointed to the ongoing banking recapitalization exercise, which requires financial institutions to significantly raise their capital base, as vital to creating shock-resistant lenders capable of supporting the economy. Cardoso also called for stronger collaboration between the CBN and fiscal authorities, stressing that policy coordination is crucial to sustaining macroeconomic reforms and driving Nigeria’s growth momentum.
On financial inclusion, Cardoso reaffirmed the CBN’s commitment to promoting fintech innovation as a tool for expanding access to financial services, reducing poverty, and integrating more Nigerians into the formal economy. He also underlined Nigeria’s strategic importance as both a large domestic market and a gateway to West Africa, noting growing interest from European investors. Eurocham president Yann Gilbert echoed this optimism, reaffirming European businesses’ commitment to supporting Nigeria’s economic transformation.
Source: Business day