Nigeria: CBN announces Reduces Interest Rates for Financial Institutions

This was announced in a circular signed on Wednesday, May 27, 2020 by the Director of Financial Policy and Regulatory Department of the CBN, Kevin Amugo.

In the circular, Amugo confirmed that central bank of Nigeria will reduce interest rates on its facilities through participating financial institutions.

CBN has approved regulatory forbearance for restructuring credit facilities in the OFI sub-sector according to the circular as follows:

‘’CBN intervention facilities availed through participating OFIs are granted a further one-year moratorium on all principal repayments, effective March 1, 2020.

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‘’Interest rates on the CBN intervention facilities through participating OFIs hereby reduced from 9% to 5% per annum for 1-year effective March 1, 2020.

‘’OFIs are granted leave to consider temporary and time-limited restructuring of the tenor and loan terms for households and businesses affected by COVID-19, subject to the recently issued guidelines for restructuring affected credit facilities in the OFIs sub-sector.”

The central bank ‘s latest policy move continues its involvement in the nation’s economy to help handle the crisis triggered by the coronavirus pandemic and its impact on households and businesses.

This comes to a day before the Monetary Policy Committee (MPC) meeting for the month of May scheduled for tomorrow Thursday, May 27, 2020.

In the meantime, the CBN has said it will continue to track developments and introduce necessary steps to safeguard financial stability and help stakeholders impacted by the COVID-19 pandemic.