In response to the Central Bank of Nigeria’s (CBN) significant increase in the Monetary Policy Rate (MPR), Nigerian banks have begun raising their lending rates. Zenith Bank, the largest bank by market capitalization, elevated its interest rate by 500 basis points to 30 percent from 25 percent, effective March 12, 2024.
In a notice to customers, Zenith Bank explained the necessity for the interest rate adjustment and expressed the need for customer understanding as they monitor the market closely. Similarly, GT Bank increased its lending rate by 500 basis points, while sources revealed that Stanbic IBTC raised its interest rates by 300 basis points in response to the MPR hike.
Analysts anticipate more banks to follow suit in the upcoming days, as the MPR serves as a benchmark for all other interest rates. When the MPR increases, banks adjust their rates upwards, and conversely, they review them downwards in the event of an MPR reduction.
Source: Business Day