By: Tijani Salako.
Nigeria’s average maximum lending rate eased to 33.16 per cent in June 2026, down from 34.78 per cent in May.
The decline reflects a modest drop in borrowing costs as the Central Bank of Nigeria maintained its benchmark interest rate amid improving macroeconomic conditions.
Data from the CBN’s latest Money Market Indicators showed the decline came after the Monetary Policy Committee kept the Monetary Policy Rate unchanged at 26.5 per cent.
The CBN has maintained that position since February, following a 50-basis-point rate cut. Despite the monthly moderation, borrowing costs remain significantly above last year’s levels.
The average maximum lending rate stood at 29.51 per cent in June 2025, indicating a year-on-year increase of 3.65 percentage points.
The maximum lending rate represents the highest interest rate banks charge customers on loans. It is widely tracked as an indicator of credit conditions in the economy. High lending rates typically discourage borrowing, investment and business expansion.
The latest decline marks only the second meaningful easing in lending rates this year. The average maximum lending rate began the year at 32.68 per cent in January before rising to 35.17 per cent in February.
It remained at that level through April, despite the CBN’s decision to lower the policy rate. The disconnect between monetary policy easing and commercial lending rates reflects the banking sector’s slow transmission of lower policy rates to borrowers.
Analysts say this continues to constrain private sector credit. At its latest meeting, the MPC voted unanimously to retain all monetary policy parameters.
The committee cited exchange rate stability, moderating inflation and uncertainty in the global economy, including geopolitical tensions in the Middle East and concerns over the outlook for the US economy.
CBN Governor Olayemi Cardoso said the committee’s decision was based on the need to preserve macroeconomic stability. He added that it would also allow previous policy measures to continue filtering through the economy.
Businesses have continued to express concern over elevated borrowing costs.
The concern is particularly strong among manufacturers and small enterprises already contending with foreign exchange reforms, higher energy prices and increased operating costs.
According to data from the Manufacturers Association of Nigeria, commercial bank credit allocation to manufacturing contracted to N6.61tn in December 2025 from N8.53tn in December 2024.
