How To Earn From The 15.5% Interest Rate Increase By CBN.

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The benchmark interest rate (MPR), according to Nigeria’s Central Bank has risen to a two-decade high of 15.5%. The rate increase amounts to a 150 basis point increase from the previous rate of 14%; and the cash reserve requirement (CRR) was also raised to 32.5%.

For your fixed deposits, demand more. Active savers should call their fund managers right away and request that they renegotiate their fixed deposit rate.

Find high-bond companies Returns – they would result in greater yields as interest rates increase throughout the nation.

Buy the dip in the stock market – We also think that share prices will fall, thus it is not a great moment to buy in the Nigerian stock market.

Purchase real estate – Landlords could anticipate more rental income as a result of rising interest rates; particularly those who do not hold mortgages.

Beware of asset fire sales: We also anticipate that some developers who are unable to make loan payments may be compelled to sell assets under pressure.

Geffen product sellers: Geffen product sellers will profit more in high-interest rate conditions, particularly if they practice strict money management.

While the CBN’s interest rate increase is intended to stop the Naira from depreciating against the dollar; we continue to feel that investing in dollar-based assets is the greatest hedge. Opportunities to make money in foreign exchange should be taken advantage of because doing so will provide them more naira to spend and maintain their purchasing power.

Nairametrics.

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