In furtherance of its sustained monetary measures to boost the nation’s economic performance, the Central Bank of Nigeria (CBN) has increased the interest rate for intervention loans from 5% to 9%, effective from July 2022.
The apex bank, which disclosed this in a press release titled ‘Adjustment Of Interest Rate On All Central Bank Of Nigeria Interventions’, had revised downward the interest rates on its intervention facilities from 9% to 5% in March 2020 as part of attempts to combat the COVID-19 outbreak.
The latest upward review of the intervention loans’ interest rate is coming on the heels of a hike in savings deposit interest rate from 1.4% to 4.2% by the monetary policy institution as part of the efforts to combat inflation.
The CBN stated: “Further to our circular dated March 15, 2022 (Ref: FPR/DIR/PUB/CIR/001/040) extending the period of interest reduction to all intervention facilities from nine per cent to five per cent per annum (as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy), the Central Bank of Nigeria hereby reverts the interest rate on all its intervention facilities to nine per cent per annum.
“The reversed rates shall be implemented as follows: All intervention facilities granted effective July 20, 2022, shall be at a nine per cent per annum; All existing intervention facilities granted prior to July 2022 shall be at nine per cent per annum effective from September 1, 2022.”
Finance experts believe that the upward review of the intervention loans’ interest rate may not be unconnected with its sustained contraction monetary policy to combat inflation in the country.
The National Bureau of Statistics (NBS) had on Monday reported that the nation’s inflation rate for July 2022 rose to a 17-year high of 19.64%, compared to the 15.6% seen in January, representing a 25% increase in inflation within seven months.
