Nigerian Stock Market Investors’ Lose N1.49 Trillion In Two Days Over Interest Rate Hike
Written by Olakunle Oke on March 4, 2024
The stock market segment of the Nigerian Exchange Limited (NGX) dropped by N1.49 trillion in two days following the hike in the interest rate.
The Monetary Policy Committee (MPC) on Tuesday, increased the Monetary Policy Rate (MPR) to 22.75 percent from 18.75 percent, which saw the stock market witnessing negative sentiment as investors are now shifting to the fixed income market.
When the MPR hike was announced on Tuesday, the stock market dropped by N773 billion, triggered by investors’ sell-off in fundamental stocks.
Also, the stock market on Wednesday extended its negative sentiment, dropping by N720.57 billion in market capitalisation to N54.317 trillion, bringing investors’ total loss in two days to N1.49 trillion.
The MPC members after the two-day meeting in Abuja, had increased the asymmetric corridor to +100 basis points /-700 basis points (Previously: +100 basis points /-300 basis points).
The members also voted to increase the CRR to 45 percent from 32.5 percent; and retained liquidity rate at 30 percent.
The CBN Governor, Olayemi Cardoso after the MPC meeting stated that the committee’s decisions were centered on the current inflationary and exchange rate pressures, projected inflation, and rising inflation expectations.
Source: Jordan 105.5fm News Bulletin
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