Banks’ Maximum Lending Rate Drops to 33.16% as CBN Sustains Monetary Policy, Costs of Borrowing Remain High

Banks’ Maximum Lending Rate Drops to 33.16% as CBN Sustains Monetary Policy, Costs of Borrowing Remain High

Kayode Tokede

The average maximum lending rate charged by Nigerian banks declined to 33.16 per cent in June 2026, easing from 34.78 per cent in May, as the Central Bank of Nigeria (CBN) sustained its monetary policy pause amid improving macroeconomic conditions.The latest Money Market Indicators released by the apex bank showed that although borrowing costs remained high, the moderation in banks’ maximum lending rates coincided with the Monetary Policy Committee’s (MPC) decision to retain the Monetary Policy Rate (MPR) at 26.50 per cent, since February.

While the lending rate is the highest interest rate charged on loans given to customers, the cost of borrowing is the total expense incurred by a customer in obtaining and servicing a loan.The report showed that despite the monthly decline in average maximum lending, lending costs remained significantly higher than a year earlier.

The CBN data indicated that the average maximum lending rate stood at 29.51 per cent in June 2025, underscoring a year-on-year increase of 3.65 percentage points.The maximum lending rate represents the highest interest rate banks may charge borrowers and serves as a key indicator of credit conditions within the economy. Businesses and investors closely monitor it because of its direct impact on borrowing costs, investment decisions and overall economic activity.