Economy
EXPLAINER: How CBN’s 22.75% Interest Rate Hike May Affect You
By Dipo Olowookere
Today, the Central Bank of Nigeria (CBN), through its Monetary Policy Committee (MPC) raised the benchmark interest rate, the Monetary Policy Rate (MPR), by 4.00 per cent or 400 basis points to 22.75 per cent from 18.75 per cent.
This rate hike was inevitable, though the margin of increase was not expected.
I know you are asking how this affects you. Hey, listen carefully, you should be bothered and I will explain why.
Now, the MPR is called the benchmark interest rate because it is what commercial banks use to determine the interest rate they give loans to their customers.
If you need to secure a loan to run a business or anything, no bank will likely give you below the MPR, which as of today is 22.75 per cent.
So, if the banks before the current hike gave loans to customers between 20 and 28 per cent when the MPR was at 18.75 per cent, you can imagine what rate they will give you that loan when the benchmark rate is 22.75 per cent, do the math yourself.
And for those who had already taken loans before this rate increment, you are not spared. Expect calls from your banks from tomorrow informing you of an upward review of the rate.
If you say you are still not bothered because you have not had any reason to get a loan from commercial banks, well, I am sorry to inform you that it will also affect you.
How? Let me break it down for you.
A business owner who obtains a loan from a commercial bank at say 30 or 35 per cent based on the current interest rate hike will surely pass this cost to consumers, which includes you reading this explainer.
So, the item you get at N100 today may likely be sold at N150 or more tomorrow because of this CBN announcement.
Then why did the central bank do this at this trying time?
Well, the theoretical reason is to make the cost of borrowing (obtaining loans) more expensive to reduce your purchasing power or spending to possibly bring down the inflation rate. The idea is that if consumers reduce their spending, producers may be forced to bring down their prices to encourage spending, which will, in turn, bring down inflation, which is the average cost of goods and services.
But for investors, the current interest rate is low because it is not more than inflation, which the National Bureau of Statistics (NBS) said was 29.90 per cent in January 2024.
An investor will prefer an environment where the rate is higher than inflation to get a return on investment (ROI).
At the moment, it is at a loss of 7.15 per cent (Interest rate – Inflation rate).
So, do not be surprised when the CBN sells treasury bills at the next primary market auction between 22 per cent and 26 per cent). The coupon rates for FGN bonds will also go up to attract investors.
As for the Cash Reserve Ratio (CRR) the MPC raised by 12.5 per cent to 45 per cent from 32.5 per cent, it is to reduce the significantly cut down on the amount of money commercial banks can make available for lending to customers.
It simply means the banks must keep 45 per cent of the total customer deposits with the CBN. Through this, the central bank is also controlling the supply of money in the system.
If you need any further clarification, please feel free to reach us at [email protected], [email protected] or [email protected].
Economy
BNB Price Reflects Changing Dynamics in the Digital Asset Market
Economy
NASD Unlisted Security Index Crosses 4,000-point Benchmark Again
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange achieved a milestone on Friday, April 24, 2026, after five securities on the platform helped with a 1.85 per cent growth.
Data showed that the NASD Unlisted Security Index (NSI) again crossed the 4,000-point benchmark yesterday.
The index chalked up 73.64 points during the trading day to close at 4,052.59 points compared with the preceding session’s 3,978.95 points, while the market capitalisation added N5.38 billion to finish at N2.424 trillion versus Thursday’s closing value of N2.380 trillion.
The price gainers were led by Okitipupa Plc, which grew by N25.00 to sell at N305.00 per share compared with the previous price of N280.00 per share. Central Securities Clearing System (CSCS) Plc gained N6.92 to close at N76.26 per unit versus N69.34 per unit, Afriland Properties Plc appreciated by N1.00 to N17.00 per share from N18.00 per share, FrieslandCampina Wamco Nigeria Plc improved by 55 Kobo to N99.55 per unit from N99.00 per unit, and Food Concepts Plc increased by 5 Kobo to N2.70 per share from N2.65 per share.
However, there was a price loser, MRS Oil, which dipped by N21.75 to N195.75 per unit from N217.50 per unit.
During the final session of the week, the value of securities jumped 75.2 per cent to N41.3 million from N23.6 million units, and the number of deals expanded by 62.9 per cent to 44 deals from 27 deals, while the volume of securities declined marginally by 0.9 per cent to 447,403 units from 451,522 units.
At the close of trades, Great Nigeria Insurance (GNI) Plc was the most traded stock by volume (year-to-date) with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units valued at N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
GNI was also the most active stock by value (year-to-date) with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 59.6 million units transacted for N4.0 billion, and Okitipupa Plc with 27.8 million units exchanged for N1.9 billion.
Economy
Naira Slips to N1,358/$1 as FX Reserves, Policy Uncertainty Concerns
By Adedapo Adesanya
It was not a good day for the Nigerian Naira in the currency market on Friday, April 24, as its value depreciated against the major foreign currencies at the close of transactions.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX), it lost N4.53 or 0.33 per cent against the United States Dollar yesterday to trade at N1,358.44/$1, in contrast to the N1,353.91/$1 it was exchanged on Thursday.
Equally, the domestic currency slipped against the Pound Sterling in the official market during the session by N8.14 to close at N1,834.02/£1, compared with the previous rate of N1,825.88/£1 and dropped N8.01 against the Euro to sell at N1,590.73/€1 versus N1,582.72/€1.
Also, the Naira depreciated against the US Dollar at the GTBank FX desk on Friday by N4 to quote at N1,370/$1 compared with the previous session’s N1,366/$1, and at the parallel market, it depleted by N5 to settle at N1,380/$1 versus the preceding day’s N1,375/$1.
Data published by the Central Bank of Nigeria (CBN) indicated that NFEM interbank turnover surged to N43.562 million across 68 deals, up from N28.117 million the previous day.
Despite the CBN’s reassurance that the recent drop in external reserves is not worrisome, the market remains unsettled by persistent concerns over liquidity constraints, policy transparency, and weakening confidence in Nigeria’s FX market as gross reserves continue to decline to $48.4 billion.
The outlook for the Dollar appears supported by broader macro risks, including elevated oil prices tied to the tanker traffic disruptions in the Strait of Hormuz and a continued US-Iran standoff over ceasefire negotiations.
A look at the digital currency market showed that investors are sitting on the edge as the US Dollar rebounded amid geopolitical and inflation risks despite continued inflows into US spot bitcoin Exchange Traded Funds (ETFs).
Solana (SOL) rose by 1.2 per cent to sell $86.45, Cardano (ADA) appreciated by 1.1 per cent to $0.2517, Dogecoin (DOGE) grew by 0.9 per cent to $0.0989, Ripple (XRP) improved by 0.3 per cent to $1.43, Ethereum (ETH) soared by 0.2 per cent to $2,316.83, and Binance Coin (BNB) chalked up 0.1 per cent to sell for $637.44.
However, TRON (TRX) depreciated by 1.3 per cent to $0.3235, and Bitcoin (BTC) lost 0.2 per cent to close at $77,562.27, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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