The disparity between the maximum lending rate and savings deposit rate within Nigeria’s banking sector witnessed a significant expansion of 22.14% in July, according to data released by the Central Bank of Nigeria (CBN).
As per the figures provided by the apex bank, the savings deposit rate inched up slightly from 5.18% in June to 5.24% in July. Meanwhile, the maximum lending rate experienced a marginal decline, dropping to 27.38% in July from 28.94% in June. The CBN also reported that the prime lending rate increased to 13.98% in July compared to 13.85% in the previous month.
The July figures for various deposit rates showed that the 12-month rate stood at 7.83%, the six-month rate at 8.54%, the three-month rate at 7.68%, the one-month rate at 7.15%, and the savings deposit rate at 5.18%. The treasury bills rate also marked an uptick, reaching 4.45% in July compared to 3.87% in June.
July’s monetary rate and inter-bank call rate figures were recorded at 18.75% and 6.73% respectively.
At the recent July meeting of the Monetary Policy Committee, the Acting Governor of the CBN, Folashodun Shonubi, announced decisions including a 25 basis point increase in the Monetary Policy Rate (MPR) to 18.75%. The asymmetric corridor was adjusted to +100/-300 basis points around the MPR, the Cash Reserve Ratio (CRR) was retained at 32.5%, and the Liquidity Ratio was maintained at 30%.
Shonubi emphasized the committee’s cautious approach in policy decisions, highlighting the need to support investment for output growth recovery. The decision to increase the MPR aimed to manage inflation expectations, bridge the negative real interest rate gap, and enhance investor confidence.