BY VICTORIA ONU, ABUJA
THE Central Bank of Nigeria, on Tuesday, said it would extend the five per cent interest rate on loan repayment by one year to March 31 2021.
The CBN Governor, Godwin Emefiele, said this at the end of the two day Monetary Policy Committee meeting held at the apex bank’s headquarters in Abuja.
The apex bank had in March February last year agreed to reduce the interest rate on all of its intervention funds from nine per cent to five per cent for a period of one year effective March 1, 2020.
But when asked whether there would be another extension in view of the coronavirus pandemic, the CBN Governor said there was a need for such extension in view of the second wave of the pandemic.
Emefiele said the five per cent interest rate would be applicable for all the apex bank’s intervention fund.
The CBN through Deposit Money Banks had provided over N3tn to Small and Medium Enterprises in the economy.
The loans were given through the Commercial Credit Guarantee Scheme and the Anchor Borrowers Programme, among others.
“On interest rate of 5 per cent concession in march, we would extend by 12 months again the interest rate of five percent on the CBN intervention, this is the CBN contribution to the Economy and any action that would support the growth of the economy is what we will do,” Emefiele said.
He said that the apex bank would continue to advise the Federal Government against embarking on another lockdown of the economy as such moves would have negative impact on Nigerians.
Meanwhile, the MPC retained the Monetary Policy Rate at 11.5 per cent, following low consumer spending.
The MPC had in September 2020 unexpectedly cut the monetary policy rate by 100 basis points to 11.5 per cent from the previously held rate which was 12.5 per cent.
Emefiele said the committee’s priority was to boost spendings across different sectors to accelerate economic recovery.
The committee also urged the banks to boost lending to aid recovery.
The MPC said it was faced with the dilemma of stagflation, inflationary pressure and to continue reversing price stability.
The MPC also retained the asymmetric corridor of +100/-700 basis points around the MPR; retain the CRR at 27.5 per cent and retain the Liquidity Ratio at 30 per cent.
