Central Bank of Nigeria (CBN) has ordered banks in country to increase the amount paid to savings deposit accounts.
Gatekeepers News reports that the directive was contained in a circular dated August 15, 2022, titled “Review Of Interest Rate On Savings Deposits” and signed by Haruna B. Mustafa, Director Of Banking Supervision.
The apex bank explained that the increase in savings interest rates, which is effective from August 1, was made in light of the return to complete 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% 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.
“However, 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 the development, the interest rate would be raise to at least 4.2% from the 1.4% it was.