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The Central Bank of Nigeria, CBN has confirmed that henceforth, the minimum interest rate on Naira savings deposits has now been increased from 0.15 percent to 4.2 percent.
Africa Daily News, New York reports that the recent change was implemented on August 1, 2022.
The rate has been increased from 10% to 30% of the Financial Regulation Rate, according to a memo from the bank dated August 15, 2022, and issued by Haruna Mustafa, director of the banking supervision department (MPR).
In an effort to combat inflation, the bank hiked the standard interest rate to 14% in July from 13%, signaling the second time in a row that the central bank would do so in 2022.
‘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% to 10% 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 CBN announced.
‘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% of MPR. This supersedes our letter dated BSD/DIR/GEN/LAB/13/052 on the subject. September 1, 2020.’
Due to the recent modification, many Nigerians may no longer need to use the different fintech companies that provide lesser interest rates on savings than commercial banks.
Eight out of 27 banks offered savings interest rates of 1.40%, as indicated by the most recent lending and deposit rates in the financial sector this was publicized on the CBN website.
These financial institutions include Access Bank, Citibank, Ecobank, Globus, Polaris, Stanbic IBTC, Sterling Bank, and Zenith Bank. A range of 0.88 to 4.20 percent was proposed by others too.