CBN Interest Rate Explained: How It Affects Nigerian Investors and Businesses

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LagosPolice

LagosPolice

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Oct 14, 2020
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The Central Bank of Nigeria (CBN) controls monetary policy through interest rate adjustments.

When the CBN raises interest rates:

  • Borrowing becomes more expensive
  • Inflation may slow down
  • Stock market may react negatively
  • Bank stocks may benefit
When rates are lowered:

  • Businesses borrow more
  • Economic activity increases
  • Stocks may rise
Investors must monitor CBN policy decisions because they directly impact stock valuations, bond yields, and savings returns.
 
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