Seven (7) ways to make money from CBN 15.5% interest rate hike.
Newsonline understands that the Central Bank of Nigeria Governor, Godwin Emefiele announced an increase in the benchmark interest rate (MPR) to a two-decade high of 15.5%.
He made this announcement at the end of the monetary policy meeting held on the 26th and 27th of September 2022.
The rate hike represents a 150-basis points hike from 14% while the cash reserve requirement (CRR) was also increased to 32.5%.
The MPR rise is the highest rate in the last 20 years, an indication of the aggressive move by the CBN to rein in Inflation as the money supply rose to its highest ever level of record.
The Monetary Policy Committee of the CBN stated that the previous rate hikes were already slowing down the rate of money supply in the economy suggesting that the current hike was meant to compliment prior ones.
“The MPC noted that a tight policy stance would help consolidate the impact of the last two policy rate hikes, which is already reflecting in the slowing growth rate of money supply in the economy. It also felt that an aggressive rate hike would slow capital outflows and likely attract capital inflows and appreciate the naira.”
While these are the potential benefits espoused by the apex bank, the rate hike has other implications for the Nigerian economy.
We also believe there are money-making opportunities that an increase in the benchmark interest rate of an economy provides for investors. Here are some of the ones we identified.
Ask more for your fixed deposits – Aggressive savers should be on the phone right now asking their fund managers to renegotiate their fixed deposit rate.
Look for high bond Yields – As interest rates rise across the country, watch out for bond prices to tank leading to higher yields.
Buy the dip with Stock Market – This is not a great time to invest in the Nigerian stock market because we also believe share prices will tank.
Buy Real Estate – Landlords, especially those who do not have mortgages should expect higher rental income due to higher interest rates.
Look out for firesale of assets – We also envisage, some developers who cannot meet up with loan repayments may be forced to sell assets under duress.
Sellers of Geffen goods – These are goods that everyone needs to buy come rain, come shine.
Dollar earners keep winning– While the CBN’s interest rate hike is aimed at curbing Naira depreciation against the dollar, we still believe investing in dollar-based assets is the best hedge.
Former Nigerian Minister, Olorogun Kenneth Gbaji is dead. NewsOnline Nigeria reports that Former Nigerian…
Peter Obi has revealed why the INEC server failed to work optimally during the 2023…
FG has vowed to block any Loan App that harasses customers. NewsOnline Nigeria reports…
LinkedIn has revealed 3 AI trends that will revolutionize recruitment. NewsOnline Nigeria reports that…
Peter Obi has claimed that the Tinubu Government is obsessed with his name and can't…
3MTT State Meetup in Akwa Ibom State fostered growth and innovation in Nigeria's Tech Industry.…