CBN asks banks to cut interest rate to 5 percent

CBN asks banks to cut interest rate to 5 percent

- Banks have been asked to restructure loan terms

- This directive was given by the Central Bank of Nigeria

- Specifically, banks were asked to reduce the interest rates to 5%

All deposit money banks in Nigeria have been urged to restructure loan terms and tenors to households and businesses affected by the coronavirus outbreak.

The Central Bank of Nigeria (CBN) gave the directive when Godwin Emefiele addressed journalists in Abuja.

The CBN governor said the interest rate of its intervention programmes has been cut to 5% from 9%, The Cable reports.

“The CBN hereby grants all deposit money banks leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households most affected by the outbreak of Covid-19 particularly oil & gas, agriculture, and manufacturing.

“The CBN would work closely with DMBs to ensure that the use of this forbearance is targeted, transparent and temporary, whilst maintaining individual DMB’s financial strength and overall financial stability of the system,” he said.

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The unfortunate situation led to panic among the country's Bureau De Change (BDC) operators, a development which eventually led to the naira being exchanged for N405 and N420 to a dollar on Thursday, March 12.

Speaking on the development, Aminu Gwadabe who is the president of the Association of Bureaux De Change Operators of Nigeria, said the fall in the oil price raised speculations among the BDC operators and Nigerians in general, leading to the crash in the value of naira.

Gwadabe, however, said the speculations were unnecessary because the Central Bank of Nigeria has been consistent in supporting liquidity to the BDC sub-sector.

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He stated that the CBN had maintained stability at N360 in more than three years consistently.

The BDC operators' association's president noted that the situation is returning to normality as naira eventually sold for N375 by the close of Thursday.

The CBN, according to Gwadabe, has also warned the BDC operators against illegal business activities while threatening to revoke the license of any operator found guilty.

The national bank has fined over 100 BDC operators over N5m for various offences, Gwadabe also noted. ( -> We keep evolving to serve our readers better.

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Source: Legit

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