COVID-19: CBN Slashes Interest Rates to 5% to Support Economy

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) announced an emergency slash in the interest rates on all its intervention facilities to 5 percent from 9 percent per annum with effect from March 1, 2020.

Governor of the CBN, Mr Godwin Emefiele, made this announcement on Monday, when he presented policy measures to tackle the effect of coronavirus on the economy.

The apex bank said it has granted all deposit money banks leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households mostly affected by outbreak of the COVID-19 disease in the areas of oil and gas, agriculture, and manufacturing.

“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 apex bank chief said.

The CBN boss also presented other policies which include the provision of N50 billion credit facility for households and small and medium scale enterprises, the extension of the moratorium on its intervention funds by one year.

“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 added.

The apex bank also said it was going to provide credit support to the health industry in the form of loans to hospitals, health care practitioners and pharmaceutical companies.

According to him, these credit facilities would be given to pharmaceutical companies planning to expand or open drug manufacturing plants in Nigeria. They would also be extended to hospitals and healthcare practitioners who plan to build health facilities or expand existing facilities to first class centres.

While promising to further issue updates on its response to economic impact of coronavirus on the economy, the central bank chief said the CBN stands ready to provide liquidity backstops as and when required in view of its role as banker to the federal government and lender of last resort.