The Central Bank of Nigeria has today slashed the interest rate payable on monies deposited in savings accounts from the previous benchmark of around 3.75 per annum to around 1.25% per annum.

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This is part of the efforts of the apex bank to mitigate the damage wrought on the economy by the COVID-19 pandemic.

According to a circular issued to all banks, the rate cut is effective from today September 1, 2020.

An excerpt from the circular, as obtained by Businesslift reads:

In line with recent market developments, the ‘Bank has reviewed the minimum interest payable on savings deposits as provided in its Guide to Charges by Banks’ consequently reviewing rates to 10% of Monetary Policy Rates.

“Consequently, all deposit money banks are hereby informed that effective September 1, 2020 interest on local currency savings deposits shall be negotiable subject to a minimum of 10% per annum of Monetary Policy Rate.” 

Experts say the new policy will facilitate rapid growth of smaller banks and also make it easier for banks to cut lending rates to borrowers.