The Stock Exchange After the MPR Raise
The Central Bank of Nigeria (CBN) raised the benchmark monetary policy rate from 18.75% to 22.75%.
At the end of the Monetary Policy Committee (MPC) meeting on Tuesday, February 27, 2024, CBN Governor Yemi Cardoso reiterated that the decision was based on the existing inflationary and exchange rate pressures and forecast inflation
The CBN’s announcement and its anticipation coincided with a decrease in the all-share index of the Nigerian stock exchange market.
Nigeria’s stock market fell by 1.38 per cent, or N773 billion after the Monetary Policy Committee (MPC) raised the Monetary Policy Rate (MPR) by 400 basis points (bps) to 22.75 per cent after its two-day bimonthly meeting.
The benchmark for interest rate increased to 22.75 per cent for the first time in eight months and is the greatest rate hike in absolute terms in around 17 years.
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Mr Cardoso also stated that the cash reserve ratio, or the commercial bank deposits held by the central bank, will be raised from 32.5 per cent to 45 per cent to control inflation by increasing the money supply. |
At the close of trading on Tuesday, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) fell from 101,995.21 points the day before to 100,582.89 points. Also, Market Capitalization fell from N55.810 trillion to N55.037 trillion.
