Finance

Why banks repriced loans after rate hike, by experts

3.2% growth projection not enough for Nigeria –CBN

Banks are reviewing lending rates for loaned funds after the Central Bank of Nigeria (CBN)-led Monetary Policy Committee (MPC) decision to raise benchmark interest rate  from 15.5 per cent to 16.5 per cent, analysts have said.

An economist and financial analyst, Michael Ndidi, said the banks are keeping eyes on their rising cost of funds and operational costs which are impacting on their profitability.

Read:  AIICO pays N47.3bn claims

The apex bank had raised the Monetary Policy Rate (MPR) by 100 basis points interest rates during last month’s MPC meeting.

According to Ndidi, the rates hike will also lead local industries to review upwards, cost of products at a time that inflation is also rising, and people’s purchasing power weakening.

He said banks do not waste time in raising lending rates, but find it difficult to increase interest on savings.

“I think the CBN should enforce its policy on interest rates on savings and monitor to ensure banks pay the right interest on deposit to savers,” he added.

Read:  CIBN honours Nova merchant bank CEO

Analysts at Cordros Capital said the MPC decision was expected based on the CBN’s commitment to reining in rising inflation.

Cordros Capital noted that the Governor of CBN, Mr. Godiwn Emefiele, had in the last two meetings, maintained that the apex bank would maintain its interest rate hikes until there is a deceleration in the inflation path.

Emefiele had pointed out that “time-tested monetary policy has shown that inflation must lag policy rates”.

Read:  Access bank’s diamondXtra to make millionaires daily

Thenation

Related posts

Nigeria attracts $1.73 billion capital inflows in Q3 2021, surges by 98%.

NigGal

Ardova grows profit before tax by 107% to N1.2bn in 3 months

NigGal

Banks risk losing time deposits over higher savings interest rates

NigGal

Dangote, MTN, Globacom lead at 2022 ‘Top 50 Brands Nigeria’

NigGal

Dangote Bags Nigerien National honour over foundation’s health intervention

NigGal

Richway microfinance bank launches quick credit on remita

NigGal

Leave a Comment