CBN's First Rate Cut Since 2020 Sparks Stock Market Sell-Off in Nigeria

The Central Bank of Nigeria (CBN) has made its first benchmark interest rate cut since 2020, reducing it by 50 basis points to 27%. This move triggered a surge in liquidity in the financial market, but also led to a sell-off in the stock market.

The Monetary Policy Committee (MPC) also adjusted the lending facility and deposit facility rates, signaling a shift towards looser monetary conditions. The overnight lending rate was lowered by 100 basis points, leading to a significant increase in banking system liquidity.

Despite this, the Nigerian Stock Exchange experienced a dip, with the All-Share Index falling by points and market capitalization decreasing by N136 billion.