Deposit money banks in Nigeria will be increasing the interest rates they charge for loans sourced from them by their customers.
This follows the increase of the Monetary Policy Rate MPR, by the Central Bank of Nigeria (CBN) on Tuesday.
The Monetary Policy Committee of the CBN after its meeting in Abuja today decided to raise interest rate by 50 basis points to 27.25per cent.
Governor of the CBN who is also the Chairman of the MPC disclosed this at the end of the MPC meeting held in Abuja.
The apex bank further increased the Cash Reserve Ratio (CRR) of commercial banks by 500 basis points from 45% to 50%.
By raising monetary policy rate by 50 basis points, banks will now borrow money from the CBN at higher interest rates thus impacting also on the inter bank rates.
This will also push up the rate at which banks lend money to their customers.