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· Total gross credit, committed for various transactions in Nigeria rose by N3.33 trillion from N15.56 trillion as on end-May 2019 to N18.90 trillion at end-June 2020
· These liquidity infusions by the central bank were mainly in manufacturing, consumer credit, general commerce and information and communication and agriculture
· CBN says that the bank customers paid between 15.01 per cent and 30.70 per cent for borrowed funds.
· However, interest paid on their term deposits dropped by 1.46 percentage points to 6.27 per cent.
Total gross credit, committed for various transactions in Nigeria rose by N3.33 trillion from N15.56 trillion as at end-May 2019 to N18.90 trillion at end-June 2020. These liquidity infusions by the central bank were mainly in manufacturing, consumer credit, general commerce and information and communication and agriculture.
The rise in interest rate reflected the liquidity condition in the Nigerian economy, says the CBN in its Q1 2020 report. The inflation rate of 12.26 per cent for March 2020 is indicative of negative real rates for deposits.
CBN says that the bank customers paid between 15.01 per cent and 30.70 per cent for borrowed funds. However, interest paid on their term deposits dropped by 1.46 percentage points to 6.27 per cent.
The average prime and maximum lending rates rose by 0.02 percentage point and 0.47 percentage point, respectively, to 15.01 per cent and 30.70 per cent, above their levels in the preceding quarter, which stood at 29.98 per cent and 14.99 per cent, respectively, in Q4 2019.
Despite the rise in lending rates, banks were paying less quantum of interest to depositors. The average term deposit rate came down by by 1.46 percentage points to 6.27 per cent. The spread between average term deposit and average maximum lending rates increased by 1.93 percentage points to 24.43 percentage points. World over the spread between the deposit and lending rates are pegged at 3 percent. The average interbank and OBB rates were 10.68 per cent and 12.08 per cent
respectively.