Nigerian banks have yet to significantly reduce lending rates nearly a week after the Central Bank of Nigeria (CBN) cut its Monetary Policy Rate (MPR) by 350 basis points from 26.5% to 23%.
The September 22 decision was the largest MPR reduction in nearly two decades, but lending rates across banks remain between about 20% and 46%, depending on borrower risk, funding costs and individual banks’ pricing models.
Checks by Nairametrics indicate that some lenders are still assessing the implications of the policy change. An official at one Tier 1 bank said there were no immediate plans to reduce lending rates, while another said any adjustment would be determined by its Asset-Liability Committee (ALCO).
A Tier 2 bank source said the lender was taking a cautious approach and waiting for greater economic clarity before changing its rates. Another bank said it was assessing the impact of the CBN decision across its loan portfolio.
The CBN has said the rate adjustment was primarily an operational recalibration aimed at bringing the MPR closer to prevailing market rates, rather than a conventional monetary easing measure. The apex bank noted that the interbank rate had been trading around 22%, well below the previous 26.5% MPR.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said the policy change should ultimately be reflected in credit pricing, while financial analyst Jerry Igwilo also expects lending rates to adjust downward, subject to borrowers’ risk profiles.
The CBN also changed the asymmetric corridor around the MPR to +50/-300 basis points while retaining the Cash Reserve Ratio at 45% for commercial banks, 16% for merchant banks and 75% on non-TSA public-sector deposits.
