Activities on the floor of the Nigerian Stock Market yesterday further plummeted by N55 billion.
Market analysts attributed the downward slide to the hike in the monetary policy rate.
The Central Bank of Nigeria, had on Monday increased the interest rate benchmark, the Monetary Policy Rate (MPR) to 12 per cent as it raised Cash Reserve Requirement (CRR) to eight per cent.
The increase was in response to the apex bank’s concern about the unusual developments in the global and domestic economies, with potential negative impact on domestic liquidity conditions and renewed threats to price and exchange rate stability.
A source said that the interest rate increase by the Central Bank of Nigeria (CBN) was inimical to the growth of the capital market.
He specifically said that the CBN’s action was a disincentive to investors in the capital market who wish to diversify their portfolios.
He noted that the move would further deplete the share prices of equities as the action would reduce appetite for borrowing especially by investors and other key stakeholders in the real sector of the economy.