The Nigerian Stock Exchange (NSE) opened on a positive note on Wednesday, after the Central Bank of Nigeria (CBN) raised key interest rate to its highest point in the bank’s available history.
The rates, which were raised to at least a 10-year high, also saw the naira depreciate on the interbank market, from 310 against the greenback to 313 as at 11am on Wednesday.
The stock market saw a sizable rise in all share index after the apex bank’s decision to move rates from 12 percent to 14 percent, in a bid to curb inflation.
All share index moved from 27, 945 on Tuesday to 28,111 as at noon on Wednesday, with market capitalisation surging from N9.597 trillion to N9.653 trillion about the same time.
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On the parallel market however, the naira appreciated to trade at at 374 to a dollar in Abuja, as against 378 on Tuesday.
Pounds went for 493, while the European currency, Euro, went for 403.
The CBN MPC said the fall in the naira over the past month was due to “normal market reaction to a new regulatory reform”, adding that the daily average is still within its “reasonably optimistic” 250/$1 band.
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“The exchange rate at the interbank market opened at N197.00/US$ and closed at N292.90/US$, with a daily average of N244.95/US$ between May 25 and July 19, 2016,” Godwin Emefiele, CBN governor, said on Tuesday.
“The initial weakness was attributable to the normal market reaction to a new regulatory reform. The MPC reaffirmed its commitment to its statutory mandate of achieving a stable naira exchange rate.”
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