By Tony Tagbo

The Central Bank of Nigeria (CBN) has directed deposit money banks in Nigeria to pay savings deposit account holders an interest of 30 per cent of the current 14% Monetary Policy Rate (MPR), reverting to what it was in 2020 before the COVID-19 pandemic era.

This was contained in a circular by the apex bank dated August 15, 2022, titled “Review of Interest Rate on Savings Deposits” and signed by Haruna B. Mustafa, Director of Banking Supervision.

Savings deposit rates are the interest rates that accrue to customers for keeping their money with the banks.

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.

“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.”

The Apex Bank had after its last Monetary Policy Committee (MPC) meeting increased the MPR from 13% to 14% in an effort to combat inflation, which reached a 17-year high of 19.64% in July 2022.