Banks in Nigeria are now required by the Central Bank of Nigeria (CBN) to pay savings deposit accounts an interest rate of at least 4.2 percent, up from the prior rate of 1.4 percent.
This was stated in a circular headed “Review Of Interest Rate On Savings Deposits,” dated August 15, 2022, and signed by Haruna B. Mustafa, Director of Banking Supervision.
The increase in savings interest rates, which will become effective on August 1, according to the apex bank, was taken in light of the complete return to normalcy after taking into account the current macroeconomic conditions.
The circular reads, “It will be recalled that as part of the efforts to ameliorate the impact of the COVID-19 pandemic, the Central Bank of Nigeria reduced the minimum interest rates payable on local currency savings deposits from 30 percent to 10 percent of the Monetary Policy Rate (MPR).
This was aimed at stimulating growth in the larger economy following the economic slowdown occasioned by the pandemic. “
The apex bank noted that Nigeria has returned to economic normalcy, the bank said, “following the return to full normalcy and considering the prevailing macroeconomic conditions, it has become necessary to effect an upward adjustment of the interest rate payable on local currency savings deposits.”
“Accordingly, effective August 1, 2022, the negotiable minimum interest rate on local currency savings deposits shall be 30 percent of MPR. This supersedes our letter dated BSD/DIR/GEN/LAB/13/052 on the subject. September 1, 2020,” the CBN said.
The circular by the CBN reads; “It will be recalled that as part of the efforts to ameliorate the impact of the COVID 19 pandemic, the Central Bank of Nigeria reduced the minimum interest rates payable on local currency savings deposits from 30 percent to 10 percent of the Monetary Policy Rate (MPR).
“This was aimed at stimulating growth in the larger economy following the economic slowdown occasioned by the Pandemic.”
