The Central Bank of Nigeria has raised the minimum interest rate on Naira savings deposits from 0.15 percent to 4.2 percent in a new directive that went into effect on August 1, 2022.
The CBN stated in a circular dated August 15, 2022, and signed by Haruna Mustafa, director of the banking supervision department, that the rate has been revised from 10% to 30% of the Monetary Policy Rate (MPR).
In an effort to combat inflation, the bank raised the benchmark interest rate to 14% from 13% in July, marking the second consecutive time the central bank would raise the rate 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 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% of MPR. This supersedes our letter dated BSD/DIR/GEN/LAB/13/052 on the subject. September 1, 2020.”
With this new development, analysts believe Nigerians may be forced to abandon various fintech firms that offer higher interest rates on savings than banks.
According to the most recent deposit and lending rates published on the CBN website, eight out of 27 banks offered 1.40 percent savings interest rates.
Access Bank, Citibank, Ecobank, Globus, Polaris, Stanbic IBTC, Sterling Bank, and Zenith Bank are among the banks involved.
