1. Investors Gain Four Trillion, Four Billion Naira (N4,400,000,000,000) as Banking Sector Leads Stock Trading
On March 29, 2024, it was reported that stock investors gained Four Trillion, Four Billion Naira (N4,400,000,000,000) as the Nigerian Exchange Group (the "NGX") concluded the month positively, notwithstanding the disappointing full-year performance of certain companies and an interest rate hike by the Central Bank of Nigeria ("CBN"). The improved performance of the stock market followed the turbulence in the foreign exchange (FX) market and consequent migration of assets to a more profitable asset class during the month. Specifically, the market capitalization of all listed equities on the NGX surged to Fifty-Nine Trillion, One Hundred and Twenty-One Billion Naira (N59,121,000,000,000.00) from Fifty-Four Trillion, Seven Hundred and Seven Billion Naira (N54,707,000,000,000.00) at the beginning of the month, representing an eight-point one percent (8.1%) increase, driven by the listing of Transcorp Power Plc at the beginning of the month.
2. CBN Introduces a Review of Minimum Capital Requirements for Commercial, Merchant, and Non-Interest Banks in Nigeria
On March 28, 2024, CBN issued a circular (the "Circular"), to all commercial, merchant and non-interest banks, and promoters of proposed banks, in relation to the new minimum share capital requirements for banks. Effective from twenty-four (24) months from April 1, 2024, the minimum share capital base for (i) commercial banks with international authorisation would be Five Hundred Billion Naira (N500,000,000,000.00), (ii) Commercial banks with national authorization would be Two Billion Naira (N2,000,000,000.00), and (iii) the new requirement for banks with regional authorization would be Fifty Billion Naira (N50,000,000,000.00).
3. CBN Increased the Monetary Policy Rate ("MPR") from 22.75% to 24.75%
The Monetary Policy Committee of CBN (the "Committee"), on March 26, 2023, announced an increment in the MPR from twenty-two-point seven five percent (22.75%) to twenty-four-point seven five percent (24.75%). This was announced during the Committee's two hundred and ninety-fourth (294th) meeting. In addition, the Committee retained the asymmetric corridor at plus one hundred (+100) basis points and minus three hundred (-300) basis points around the MPR. The Cash Reserve Ratio (CRR) was retained at forty-five percent (45%) whilst the Liquidity Rate was retained at thirty percent (30%).
4. CBN Sells United States Dollars to Bureau De Change operators (BDCs) at One Thousand, Two Hundred and Fifty-One Naira (N1,251.00) to One United States Dollars (US$1.00).
From March 25, 2024, CBN commenced the sale of United States Dollars to Bureau De Change operators (BDCs). CBN sold Ten Thousand United States Dollars (US$10,000.00) to each BDC at a rate of One Thousand, Two Hundred and Fifty-One Naira (N1,251.00) to One United States Dollar (US$1.00). According to CBN, all eligible BDCs were instructed to sell to qualified end users with a margin not exceeding one point five percent (1.5%) above the buying price. This marks the reintroduction of United States Dollar sales to BDCs following a prolonged suspension by CBN in 2021.
5. Nigerian Economy Records over One Billion, Five Hundred Million United States Dollars (US$1,500,000,000.00) Inflow.
On March 22, 2024, Mrs. Hakama Sidi Ali, CBN's acting Director of Corporate Communications (the "DCC") announced to the media that CBN recorded an inflow of over One Billion, Five Hundred Million United States Dollars (US$1,500,000,000.00) into the economy in the last days of the month of March, which indicates that its monetary policy efforts are working positively.
The DCC noted that data available to CBN indicated that the inflow resulted from the bank's effort to stabilise the foreign exchange market and that Naira has also continued to record gains in the Autonomous Foreign Exchange market as it traded at One Thousand, Three Hundred and Nine Naira (N1,309.00) to One United States Dollar (US$1.00) (at the time of the report) as against One Thousand, Six Hundred and Eleven Naira (N1,611.00) to One United States Dollar (US$1.00) in the second week of March 2024.
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