Nigeria unveiled another set of measures aimed at forcing lenders to extend more credit in an effort to revive economic growth, this time cutting the amount of money companies can keep in interest-bearing accounts at the central bank.
Banks will no longer receive interest payments on deposits exceeding 2 billion naira ($5.5 million), the Central Bank of Nigeria said in a statement posted on its website on Wednesday night. That compares with a previous limit set in 2014 of 7.5 billion naira through the central bank’s standing deposit facility.
The move comes less than a week after the Abuja-based central bank ordered lenders to use at least 60% of their deposits for loans by the end of September, or have their cash-reserve requirements increased, meaning they’ll be forced to leave more of their cash with the central bank.
“The rule is geared at making banks lend,” Kunle Ezun, an analyst at Ecobank Transnational Inc in Lagos, said by phone. “It is to encourage banks to move funds to areas the central bank wants to drive growth.”
Banks are reluctant to lend with the economy struggling to recover from a 2016 contraction, double-digit inflation and the lure of buying government bonds that pay average yields of 14.2%.
Latest Stories
-
We’ll not engage in opaque and obscure deals when elected – Prof Opoku-Agyemang
8 mins -
Energy and Finance Ministries must provide funding to fix energy challenges – IES
16 mins -
Reintroduce Fiscal Responsibility Act to tackle election budget overrun – Osafo Marfo
17 mins -
Prioritise transparency, avoid suppressing the truth – Opoku-Agyemang advises EC
22 mins -
In times of setbacks, I won’t say I was only the driver’s mate – Naana Jane assures Mahama
24 mins -
Joselyn Dumas opens up on why single mothers struggle to find partners
26 mins -
Three damaged ECG pylons result in power outage for 9 Shama communities
29 mins -
Dual citizens eligible for Chief Justice, Chief Director, other positions – Supreme Court rules
1 hour -
SIGA urges increased financial support for SOEs
2 hours -
Akufo-Addo vows to enhance Ghana’s power supply
2 hours -
19 steps for getting over even the most devastating breakup fast
5 hours -
8th Ghana CEO Summit launched with focus on AI transformation, economic diversification
5 hours -
Prof Opoku-Agyemang has not been given a fair appraisal – Ablakwa
5 hours -
Rainstorm wreaks havoc in Keta and Anloga districts, residents count their losses
5 hours -
Global Plastics Treaty negotiations begin in Ottawa as countries converge on phasing out problematic plastic uses
5 hours