Nigerians to Pay More to Borrow As CBN Increases Interest Rates to 16.5%, Highest in 21 Years
- The Central Bank of Nigeria has increased interest rates by 100 base points to the highest level in 21 years.
- The CBN revealed the new rate during its Monetary Policy Committee meeting on Tuesday, November 22, 2022
- CBN's new interest rate will mean Nigerians will be paying more to borrow and service debt
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The Central Bank of Nigeria (CBN) has raised the monetary policy interest rates to a 21-year-high of 16.5 per cent.
Governor of CBN, Godwin Emefiele, while reading the communique on Tuesday at the last MPC meeting for 2022 in Abuja.
According to Emefiele, the increase would help restore investors’ confidence whilst the current high inflation rate.
Source: Getty Images
Legit.ng had previously reported that the National Bureau of Statistics revealed that Nigeria’s inflation rate rose to 21.09% in October 2022 from 20.77% recorded in the previous month.
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Emefiele words:
"The MPC noted with concern the continued aggressive movement in inflation, even after the three consecutive rate hikes at its previous meetings.
He also expressed its unrelenting resolve to restore price stability while providing the necessary support to strengthen the fragile recovery.”
Impact of the new interest rate
There are several expectations from the new interest rate, which analysts believe will be to lure foreign inflows into the country and ease the pressure on the naira.
Razia Khan, managing director, Chief Economist, Africa and Middle East Global Research, Standard Chartered Bank, noted:
“We think this implies an eventual NAFEX rate of about 500 – we believe that the CBN may be preparing the ground for FX reforms and is willing to accommodate higher market interest rates in order to attract foreign portfolio investors.
"We now expect a 150bps hike in the monetary policy rate to 17.0 per cent in November (consensus: 16.0%, prior 14.0%).”
Another impact of the new interest rate is that Nigerians with bank loans will have to pay more money to service their loans. In addition, the interest rate on bank savings will rise.
Nigerian banks announce new working days, closing time
Meanwhile, Nigerian banks have announced changes to their operating hours in order to assist Nigerians holding soon-to-expire Naira currencies
The banks have already announced that they have delivered notifications of their working hours via their social media channels and customers' emails
Details of the contents of their emails and changes were captured by Legit.ng.
Source: Legit.ng
