Nigerian Banks have introduced an increase in the interest rate on savings accounts to 5.40% per annum. This is coming after the Central Bank of Nigeria’s (CBN) hike of the Monetary Policy Rate (MPR).
One of Nigeria’s leading financial institutions, Access Bank, announced in an email to customers that it will reflect the new CBN interest rate on savings accounts to be effective immediately.
According to the email from Access Bank, it increased the interest rate on all savings accounts to 5.40% per annum.
Also, Zenith Bank, First Bank, FCMB, and Fidelity Bank, among others, announced a new interest rate on savings accounts to similar rates to reflect the new MPR by CBN.
During its last MPR meeting, the CBN announced a new hike in the interest rate to 18% to combat rising inflation and improve the standard of living in the country.
The effect of the quarterly hike in interest by the CBN can be felt in purchasing power, the standard of living, and the hike in prices of consumer goods.
The hikes also erode savings in banks and other financial instruments.
Commercial banks use the rate as their benchmark for their lending. High-interest rate increases borrowing costs and encourages people to spend less and save more.