4 Investment Strategies to Consider as CBN Holds Interest Rate at 27.5%
The Central Bank of Nigeria (CBN) has once again decided to maintain its benchmark interest rate at 27.5%, marking the third time this year that the Monetary Policy Committee (MPC) is holding firm on rates.
So, what does this mean for investors like you?
Let’s break it down
Why This Matters
• The decision wasn’t unexpected, and the market didn’t react wildly—equity markets rose slightly by less than 1%.
• Treasury bill yields are trending downward, with the 1-year paper now at 18.86%, down from 19.47%.
• Lower yields in fixed income means investors need smarter strategies to balance risk and returns.
✅ Here Are 4 Key Strategies to Consider:
1. Lock in Longer Tenors
“To cushion falling rates, lock funds you won’t need soon in long-term instruments,”
— Ayodeji Ebo, MD, Optimus by Afrinvest
✅ Instruments to consider:
• Treasury Bills (270–360 days)
• Good-rated Commercial Papers (CPs)
• High-Yield Savings Accounts (HYSAs)
This shields your returns from future rate cuts.
2. Explore FGN Bonds (if you haven’t already)
Those who bought into FGN bonds earlier in the year at 20%–21% are now smiling, especially if they sell in today’s market. Even for long-term holders, you’re locked into attractive yields.
3. Diversify into Corporate Bonds & Eurobonds
Meristem’s 2025 outlook suggests:
• ✅ Up to 25% in Eurobonds (to hedge against inflation and naira depreciation)
• ✅ Up to 25% in FGN bonds
• ✅ Up to 20% in Corporate Bonds
Great for long-term, high real returns.
4. Maintain Liquidity with Short-Term Picks
Allocate up to 15% to short-term CPs and T-bills—helps you stay liquid and ready for emerging opportunities.
Quick Takeaway
➡️ Softening yields = More interest in equities
➡️ Bond investors need to reposition smartly
➡️ Mix of fixed-income and equity exposure is key
Whether you’re a conservative saver or a balanced investor, now’s the time to rethink your portfolio strategy.
The Central Bank of Nigeria (CBN) has once again decided to maintain its benchmark interest rate at 27.5%, marking the third time this year that the Monetary Policy Committee (MPC) is holding firm on rates.
So, what does this mean for investors like you?
Let’s break it down
Why This Matters
• The decision wasn’t unexpected, and the market didn’t react wildly—equity markets rose slightly by less than 1%.
• Treasury bill yields are trending downward, with the 1-year paper now at 18.86%, down from 19.47%.
• Lower yields in fixed income means investors need smarter strategies to balance risk and returns.
✅ Here Are 4 Key Strategies to Consider:
1. Lock in Longer Tenors
“To cushion falling rates, lock funds you won’t need soon in long-term instruments,”
— Ayodeji Ebo, MD, Optimus by Afrinvest
✅ Instruments to consider:
• Treasury Bills (270–360 days)
• Good-rated Commercial Papers (CPs)
• High-Yield Savings Accounts (HYSAs)
This shields your returns from future rate cuts.
2. Explore FGN Bonds (if you haven’t already)
Those who bought into FGN bonds earlier in the year at 20%–21% are now smiling, especially if they sell in today’s market. Even for long-term holders, you’re locked into attractive yields.
3. Diversify into Corporate Bonds & Eurobonds
Meristem’s 2025 outlook suggests:
• ✅ Up to 25% in Eurobonds (to hedge against inflation and naira depreciation)
• ✅ Up to 25% in FGN bonds
• ✅ Up to 20% in Corporate Bonds
Great for long-term, high real returns.
4. Maintain Liquidity with Short-Term Picks
Allocate up to 15% to short-term CPs and T-bills—helps you stay liquid and ready for emerging opportunities.
Quick Takeaway
➡️ Softening yields = More interest in equities
➡️ Bond investors need to reposition smartly
➡️ Mix of fixed-income and equity exposure is key
Whether you’re a conservative saver or a balanced investor, now’s the time to rethink your portfolio strategy.