Experts say lower policy rate may not quickly reduce borrowing costs
A reduction in Nigeria’s monetary policy rate may not immediately make loans cheaper, experts say. Mr Onakoya told Premium Times that existing contractual agreements could delay the transmission of the lower policy rate to borrowers, though the supplied material gives no details of the size or timing of the cut.
Cheaper loans may not follow immediately from a reduction in Nigeria’s monetary policy rate, according to experts cited by Premium Times. Mr Onakoya said existing contractual agreements could delay the transmission of the lower policy rate to borrowers. That means lenders may not be able to revise the interest rates on all existing facilities at once, although the supplied material does not explain the terms of those agreements or how long any delay might last.
The excerpt does not state the size of the monetary policy rate cut, when it was announced or which categories of borrowers could be affected. It also does not provide comments from lenders or other experts on the expected timing of any reduction in borrowing costs.
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