On Friday, 8 January 2021, the Central Bank of Nigeria (CBN) moved to cut over N600 billion in Cash Reserve Requirement (CRR), creating a chaotic scarcity of funds and shortage of foreign exchange in the economy.
The latest CRR policy mandates banks to keep 27.5 percent of deposits with the CBN. Recently, the apex bank debited the accounts of 23 deposit money banks with N349.72 billion over Cash Reserve Ratio (CRR) breaches. This move is to improve lending to the real sector, mop up liquidity and regulate the economy.
Below is the Ventures Africa Weekly Economic Index for the week ending 8th of January, 2021. This economic index gives you a glimpse into other recent activities in Nigeria’s economy as well as changes and prices that could affect the economy.
Nigerian Stock Exchange
The NSE All-Share Index and Market Capitalization depreciated by 0.37 percent to close the week at N40,120.22 and N20.978 trillion respectively. However, all other indices finished higher with the exception of NSE Premium, NSE Lotus II and NSE Industrial Goods which depreciated by 2.99 percent, 1.22 percent and 2.29 percent while the NSE ASeM and NSE Growth Indices closed flat.
Top five price gainers
Japaul Gold & Ventures Plc.
B.O.C. Gases Plc.
NEM Insurance Plc.
Seplat Petroleum Development Company Plc.
Linkage Assurance Plc.
Top five price decliners
Deap Capital Management & Trust Plc.
Royal Exchange Plc.
Dangote Cement Plc.
Associated Bus Company Plc.
May & Baker Nigeria Plc.
How did the Naira fare?
Nigeria’s central bank governor, Godwin Emefiele, on January 26 dismissed calls to devalue the naira in his monetary policy committee statement. Instead he chose to continue propping up the currency at 197-199 naira to the dollar and maintain foreign-exchange restrictions. As a result, the naira on the black market is hovering around a record low of 305, fuelling complaints from domestic and foreign businesses who can’t access dollars required for imports. / AFP / PIUS UTOMI EKPEI (Photo credit should read PIUS UTOMI EKPEI/AFP/Getty Images)
The Naira depreciated against the dollar at the close of last week. The exchange rate declined to N396.43 per dollar on the 8th of January, 2021 as against N N382.53 recorded last week.
How did the price of oil fare?
Brent oil prices closed out the week on the 8th of January 2021 at $52.26 per barrel, a decrease from the $55.99 per barrel recorded a week earlier.
