CBN Cuts Interest Rate On Savings Deposits To Stimulate Economic Growth 

Mr. Godwin Emefiele, Governor, Central Bank of Nigeria. Photographer: Chris J. Ratcliffe/Bloomberg.

BEVERLY HILLS, August 31, (THEWILL) – The Central Bank of Nigeria Monday cut interest rate payable on monies held in savings accounts to around 1.25% per annum from the previous benchmark of around 3.75 per annum.

The rate cute is effective from September 1, 2020, according to a circular to all banks from the regulator obtained by THEWILL.

With the development, analysts expect a mass exodus of funds idling in savings deposit accounts into money market instruments, which currently gives returns of around 3-5% per annum, as well as the real sector.

“This is a game-changer. This makes keeping monies in savings deposit less attractive to depositors,” a senior banker said.

The move, according to one analyst interviewed by THEWILL, will allow smaller banks grow faster and also make it easier for banks to cut lending rates to borrowers.

Letter to All Banks on Interest Rate on Savings Sept 2020