The Central Bank of Nigeria has agreed to leave the critical sectors and manufacturing industries at a five per cent interest rate per annum until March 2023.
This was disclosed after the resolution of the Monetary Policy Committee to increase the benchmark interest rate to 13 per cent from 11.5 per cent.
Rate increases of this nature often lead to increases in lending rates across the various sectors of the economy.
The CBN said, “The MPC is of the view that rates on the development finance initiatives of the Bank should remain at five per cent till March 2023.”
These industries ought to pay an interest rate of nine per cent per annum, but the five per cent interest rate per annum is a form of subsidy for industry players, even though such rates may rise as high as 20 per cent per annum at commercial banks.
According to the CBN, the decision to leave interest rates for intervention funds at 5 per cent, was a measure to stimulate economic growth in critical sectors of the economy.
As part of the CBN’s development finance activities, it has continued to fund activities across several sectors of the economy, which came in form of loans from the CBN through commercial and developmental banks.
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