The Central Bank of Nigeria has reversed its five per cent intervention loans granted before July 20, 2022 to cushion the effect of COVID-19 on the economy to nine per cent effective from September 1, 2022.
It disclosed this in a circular to all banks and Other Financial Institutions titled, ‘Adjustment of interest rate on all Central Bank of Nigeria interventions’, which was signed by the Director, Financial Policy and Regulation Department, Chibuzo Efobi, on Wednesday.
The banking regulator maintained interest rates on intervention loans granted after July 20 at nine per cent.
It stated in the circular that, “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.”
It would be recalled that in March 2020, as part of measures to respond to COVID-19 outbreak, the CBN reduced interest rates on its intervention facilities from nine per cent to five per cent.
The CBN extended the repayment period at the end of its expiration in March 2021 to March 2022.
In March, 2022, it issued another circular to “extend the five per cent per annum interest rate on all CBN intervention facilities for one year. This takes effect respectively from the 28th of February 2022.”