Emefiele said reducing interest rate would be a bad idea due to the country's inflation rate, which is at a high 16%.
The governor was speaking at a lecture titled "The dilemma of monetary policy and exchange rate management in a recession: Potential options for Nigeria" at the Economics Department of the University of Nigeria, Nsukka (UNN).
Senate President, Bukola Saraki, had recently called on the CBN to cut the interest rates due to its effect on the survival of businesses in the country.
In response, Emefiele said reducing interest rates would be a bad idea due to the country's inflation rate (which is at a high 16%), and rising operation costs in the banking sector.
He said a cut in the interest rates will not necessarily improve the country's economic growth, as the high inflation rate would be a problem to achieving that.
According to him, "Interest rates reflect not just the cost of capital, but also the cost of doing business, and so, we need to also look at interest rates from the perspective of the lender.
"Given that most banks have to individually provide security, power and other infrastructure, it is not surprising that some of these costs are passed on to customers in the form of high interest rates."