The Nigerian naira appreciated on Wednesday, while stocks plunged on the Nigerian stock exchange (NSE) following the outcome of the Central Bank of Nigeria (CBN) monetary policy committee meeting.
The naira strengthened slightly at the parallel market to trade at 321 to the dollar, N1 stronger than its position yesterday.
“We now buy the naira at 318, so we sell between 320 and 321 as against 322 and 323 we sold yesterday,” a trader told TheCable in Abuja.
The movement of the stock exchange was however negative, with the market shedding over N97 billion to end the day at N8,853,022,855,897.26.
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Mobil, Total, Dangote cement, Guinness and Seplat petroleum lost N7.54, N7.49, N4, N3.07 and N2 per share, respectively.
On Tuesday, the CBN decided to cut monetary policy rate, reversing its earlier policy to allow liquidity in the Nigerian economy.
The CBN MPC decided to “raise MPR by 100 basis points from 11.00 per cent to 12.00 per cent; Raise CRR by 250 basis points from 20.00 to 22.50 per cent; retain Liquidity Ratio at 30.00 per cent; and Narrow the asymmetric corridor from +200 and -700 basis points to +200 and -500 basis points”.
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The bank has been criticised for making a reversal on its initial policy to keep MPR at 11 percent, but some analysts say the move was in anticipation of more liquidity from budget 2016.
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