Through a circular signed by the Director of Financial Policy and Regulation Department, of the Central Bank of Nigeria, CBN, Chibuzo Efobi, the apex bank
has reversed the five per cent interest rate on all its intervention facilities to nine per cent per annum.
Effective date for the reversal according to the circular is September 1, 2022.
The CBN, had in March 2020, following the outbreak of COVID-19, announced measures to reduce the negative impact of the pandemic on businesses and households.
Some of the measures include the reduction of interest rates on the bank’s intervention facilities from nine per cent to five per cent per annum for one year and granting of a one-year moratorium on all principal payments for its intervention facilities.
A year later, it extended the five per cent per annum interest rate on its intervention facilities by 12 months, to expire on February 28, 2022 and later to March 2023
“In effect, the concessionary interest rate of five per cent on our intervention facilities would now be extended until March 1, 2023,” it stated.
But the new CBN circular has returned the interest rate to nine per cent before the March 2023 deadline,” the CBN circular, addressed to banks and other financial institutions, reads: “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 9 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 9 per cent per annum effective from September 1, 2022.
“Further enquiries on the provisions of this Circular may be referred to the Director, Development Finance Department.” It stated.