CBN will be reducing interest rates on its facilities through participating financial institutions from 9 per cent to 5 per cent per annum for a year
The Central Bank of Nigeria (CBN) on Wednesday said that as part of its monetary and financial policy measures to further mitigate the impact of the Coronavirus (COVID-19) pandemic on households and businesses, IT has approved regulatory forbearance for the restructuring of credit facilities in the Other Financial Institution (OFI) sub-sector.
In a circular signed by the CBN’s Director for Financial Policy and Regulatory Department, Kevin Amugo, dated Wednesday, May 27, 2020, the apex bank said that it will be reducing interest rates on its facilities through participating financial institutions from 9 per cent to 5 per cent per annum for a year with effect from March 1, 2020.
According to the circular, CBN has approved regulatory forbearance for the restructuring of credit facilities in the OFI sub-sector as follows:
‘’CBN Intervention facilities availed through participating OFIs are granted a further one-year moratorium on all principal repayments, effective March 1, 2020.
‘’Interest rates on the CBN intervention facilities through participating OFIs hereby reduced from 9% to 5% per annum for 1-year effective March 1, 2020.
‘’OFIs are granted leave to consider temporary and time-limited restructuring of the tenor and loan terms for households and businesses affected by COVID-19, subject to the recently issued guidelines for restructuring affected credit facilities in the OFIs sub-sector.”
This new policy measure by the apex bank is in continuation of its intervention in the nation’s economy so as to help manage the crisis caused by the coronavirus pandemic and reduce its effects on household and businesses.
This is coming a day before the Monetary Policy Committee (MPC) meeting for the month of May which has been slated for tomorrow Thursday, May 27, 2020.
Meanwhile, the CBN said that it shall continue to monitor developments and implement appropriate measures to safeguard financial stability and support stakeholders impacted by the COVID-19 pandemic.