The average prime lending rate in Nigeria’s banking sector rose to 18.88 per cent in August 2025, up from 18.54 per cent recorded in July 2025, as commercial banks adjusted to the recent reduction of the Monetary Policy Rate (MPR) by the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN).
Despite the rate cut, the August prime lending rate marked the highest level so far in 2025, reflecting banks’ cautious response to evolving macroeconomic conditions. The CBN had reduced the MPR to 27 per cent in August, after maintaining it at 27.5 per cent from January to July 2025, in an effort to stimulate lending and economic activity, particularly in agriculture, manufacturing, and small and medium enterprises (SMEs).
According to financial analysts, the upward adjustment in lending rates is linked to banks’ cost of funds, risk assessment, inflation trends, and liquidity conditions in the economy. The CBN’s recent policy easing, coupled with improving inflation and macroeconomic indicators, has encouraged banks to rebalance lending portfolios while maintaining profitability and risk control.
Throughout 2025, Nigeria’s prime lending rate has fluctuated between 17.96 per cent and 18.88 per cent, showing only minor month-to-month variations despite the largely stable monetary policy stance during the year.
