JUST IN: Banks jerk up interest rates on savings deposits money market

Banks have begun to increase interest rates on deposits in line with the sustained hike in the Monetary Policy Rate, MPR, by the Central Bank of Nigeria, CBN.

At its last Monetary Policy Committee, MPC, meeting previous week, CBN raised MPR by another 25 basis points the sixth consecutive raise in the past one year, to 18.75 per cent from 18.50 per cent, in a bid to intensify efforts to curb rising inflation.

CBN also narrowed the asymmetric corridor around MPR to +100/-300 from +100/-700 basis points. MPR is the benchmark interest rate that determines other interest rates in the financial system.

Consequently, banks are expected to increase the minimum interest rate in compliance with CBN policy which pegs the minimum interest rate on savings account deposits at 30 per cent of MPR.

“Effective August 1, 2022, the negotiable minimum interest rate on local currency savings deposits shall be 30% of MPR. This supersedes our letter dated BSD/DIR/GEN/LAB/13/052 on the subject. September 1, 2020”, the CBN said in a circular dated August 15, 2022 titled “Review of Interest Rate on Savings Deposits”, signed by Haruna B. Mustafa, Director of Banking Supervision.

In compliance with this adjustment, Standard Chartered Bank Nigeria, in an email to its customers said: “We are pleased to confirm that the interest rates on our Savings accounts have been revised upwards.

“Please note that credit interests are computed on daily account balances and withdrawals are limited to 4 per month to qualify for interest payment.”
Also announcing an upward review of interest rates, Stanbic IBTC Bank, in an email to customers said: “Dear Esteemed Client, following the recent upward review of the Monetary Policy Rate by the Central Bank of Nigeria (from 18.50% per annum to 18.75% per annum), please be informed that all product offerings linked to the Monetary Policy Rate will be adjusted accordingly. This is effective from 25 July 2023.”