How can you suggest quantitative easing in a country like Nigeria that is still very incompetent with monetary and fiscal policies. What would be the objective of QE in Nigeria? It is only countries that have the right balance of fiscal and policies that can/should employ QE and QE is only used to battle deflation or to stimulate growth when you can not lower interest rates.

You can not write off local content because that money belongs to investors. Besides, I don't understand how Nigeria can have creditors in Nigeria. Can someone explain that? I have a feeling that figure is non-existent or exaggerated. Does Nigeria raise funds from the capital markets in Lagos?

[size=14pt]I would like to burst your bubble quantitative easing have already happened twice in Nigeria, during Soludo's last throe, he put up a straight face by proclaiming publicly that the world wide slump would not affect Nigeria. He knew the state of Nigeria Banks at that point in time. Do you know why the Naira lost 25% of its value during the last 6 months of Souludo's stewardship that is bacause the CBN had already embarked on covert quantitative easing policies, qiuetly and discreetly bailing Akingbola, Ibru and others. 

During Sanusi reign it bacame an official policy unlike during Soludo'd regime. The $2 billion fund used to shore-up the capital base of those debt ridden banks where do you think it came from.  And why did Sanusi declared that investors capital in those distress banks have gone down the pan? 

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KnowAll:


[size=14pt]I would like to burst your bubble quantitative easing have already happened twice in Nigeria, during Soludo's last throe, he put up a straight face by proclaiming publicly that the world wide slump would not affect Nigeria. He knew the state of Nigeria Banks at that point in time. Do you know why the Naira lost 25% of its value during the last 6 months of Souludo's stewardship that is bacause the CBN had already embarked on covert quantitative easing policies, qiuetly and discreetly bailing Akingbola, Ibru and others. 

During Sanusi reign it bacame an official policy unlike during Soludo'd regime. The $2 billion fund used to shore-up the capital base of those debt ridden banks where do you think it came from.  And why did Sanusi declared that investors capital in those distress banks have gone down the pan? 

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That is not quantitative easing; that is simply shoring up the capital bases of the banks, similar to the bailouts of the banks in the US. QE goes directly into the public in open market operations and it involves a process of buying government debt (bonds, gilts), corporate bonds, mortgage backed securities from investors. The aim is to increase the money supply in circulation. QE is not used to solve debt problems.

What Does Quantitative Easing Mean?
A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.

Investopedia explains Quantitative Easing
Central banks tend to use quantitative easing when interest rates have already been lowered to near 0% levels and have failed to produce the desired effect. The major risk of quantitative easing is that although more money is floating around, there is still a fixed amount of goods for sale. This will eventually lead to higher prices or inflation.

That is not quantitative easing; that is simply shoring up the capital bases of the banks, similar to the bailouts of the banks in the US. QE goes directly into the public in open market operations and it involves a process of buying government debt (bonds, gilts), corporate bonds, mortgage backed securities from investors. The aim is to increase the money supply in circulation. QE is not used to solve debt problems.

What Does Quantitative Easing Mean?
A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.

Investopedia explains Quantitative Easing
Central banks tend to use quantitative easing when interest rates have already been lowered to near 0% levels and have failed to produce the desired effect. The major risk of quantitative easing is that although more money is floating around, there is still a fixed amount of goods for sale. This will eventually lead to higher prices or inflation.

[size=16pt]

We Printed More Money to Save Banks, Says CBN[/size]



Wednesday, September 02, 2009 -

The Central Bank of Nigeria (CBN) disclosed last weekend that it had printed more naira, in response to the nation's economic and financial crises and in line with last year's suggestion by economist and Group Managing Director of Global Fleet Group, Barrister Jimoh Ibrahim.

Responding to a question at a Town Hall meeting with stakeholders in London on how the Central Bank of Nigeria (CBN) sourced the N420 Billion it recently injected into five banks in the country, CBN Governor Sanusi Lamido Sanusi said: "We printed money.

We created an asset on the balance sheet basically to pump money into the system because money supply had been negative in the first half of the year. We did not borrow money."

The Global Fleet chief had in July last year while reacting to the global economic meltdown suggested that the banking watchdog should print more naira. The suggestion was widely criticized and allegedly discarded by CBN under its immediate past governor, Prof. Chukwuma Soludo.

But now, according to Ibrahim, the new CBN governor has "followed the advice and unknown to many, it has quietly gone underground to print more naira."



[size=14pt]Need I say more, give it whatever fancy name or conatation you like, the bottom line money was printed like toilet paper to safe our banks, I would not lose any sleep over our local debts, that can always be taken care off. At least we heard from the horse mouth.

[/size]

KnowAll:


[size=16pt]

We Printed More Money to Save Banks, Says CBN[/size]



Wednesday, September 02, 2009 -

The Central Bank of Nigeria (CBN) disclosed last weekend that it had printed more naira, in response to the nation's economic and financial crises and in line with last year's suggestion by economist and Group Managing Director of Global Fleet Group, Barrister Jimoh Ibrahim.

Responding to a question at a Town Hall meeting with stakeholders in London on how the Central Bank of Nigeria (CBN) sourced the N420 Billion it recently injected into five banks in the country, CBN Governor Sanusi Lamido Sanusi said: "We printed money.

We created an asset on the balance sheet basically to pump money into the system because money supply had been negative in the first half of the year. We did not borrow money."

The Global Fleet chief had in July last year while reacting to the global economic meltdown suggested that the banking watchdog should print more naira. The suggestion was widely criticized and allegedly discarded by CBN under its immediate past governor, Prof. Chukwuma Soludo.

But now, according to Ibrahim, the new CBN governor has "followed the advice and unknown to many, it has quietly gone underground to print more naira."



[size=14pt]Need I say more, give it whatever fancy name or conatation you like, the bottom line money was printed like toilet paper to safe our banks, I would not lose any sleep over our local debts, that can always be taken care off. At least we heard from the horse mouth.

[/size]

Ok, I get your point now but that only underscores the point I made earlier about Nigeria not having the comptence to strike a balance between fiscal and monetary policies. Does Sanusi know what he is doing? So while the rest of the world was raising the capital for bailouts from the markets, Nigeria was printing money and increasing inflation without any policies to reign in inflation.

Ok, I get your point now but that only underscores the point I made earlier about Nigeria not having the comptence to strike a balance between fiscal and monetary policies. Does Sanusi know what he is doing? So while the rest of the world was raising the capital for bailouts from the markets, Nigeria was printing money and increasing inflation without any policies to reign in inflation

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[size=14pt]But these new craze that oyinbo people are printing money like mad, Japan, USA, and the UK are litrally printing billions of dollars,  yen and pounds, this akward policy should not enter Sanusi's DNA, he should thread carefully with such a policy,  he can only continue doing this kind of thing with certain economic factors taking into the equation like you rightly said.

Making it a norm and our bread and butter can easily suck the country into that uncontrollable spiral of hyper inflation just like in Uganda during Idi Amin's time and Mugabe's Zimbabwe. Although we have foreign exchange coming in from oil and the diasporas fund which is helping the country to hedge their bet on this policy for now.

This policy should be a policy of last resort thus.  ?[/size]??

Debt is good. The world was built on debt. It's what u do with the debt that counts

I know Jonathan is incapable of leading the country.

KnowAll:

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[size=14pt]But these new craze that oyinbo people are printing money like mad, Japan, USA, and the UK are litrally printing billions of dollars,  yen and pounds, this akward policy should not enter Sanusi's DNA, he should thread carefully with such a policy,  he can only continue doing this kind of thing with certain economic factors taking into the equation like you rightly said.

Making it a norm and our bread and butter can easily suck the country into that uncontrollable spiral of hyper inflation just like in Uganda during Idi Amin's time and Mugabe's Zimbabwe. Although we have foreign exchange coming in from oil and the diasporas fund which is helping the country to hedge their bet on this policy for now.

This policy should be a policy of last resort thus.  ?[/size]??

It appears that Sanusi does not know what he is doing. Like you stated, QE is always a last measure. The US and Japan are battling deflationary pressures and QE will not lead to inflation in the short term while interest rates remain close to 0%. I don't know what interest rates and inflation are in Nigeria but I am guessing they are in double digits. Should anyone be printing money is such conditions?

Like someone said earlier: The question is what we have done with the debt we accumulated.

The Answer is : NOTHING. ZILCH. NADA.

This is almost a repeat of the late seventies and early eighties when our debt profile ballooned and after all was said and
done, we had only a bloated government to show for it.

Thank God much of the debt is in Naira sha.

We should not advocate for QE in Nigeria. The money will simply develop wings. QE should only be used by countries with proper accountablility and checks and balances.

QE is only used when all other measures have practically failed and when complete lowering of Interest Rate has not helped either.
What is the interest rate in Naija sef?

ola olabiy:

We should not advocate for QE in Nigeria. The money will simply develop wings. QE should only be used by countries with proper accountablility and checks and balances.

QE is only used when all other measures have practically failed and when complete lowering of Interest Rate has not helped either.
What is the interest rate in Naija sef?

So Idi-Amin-esque, printing money to finance debt.

Inflation rate is 13.6% and MPR is at 6.26% (from cenbank.org). For the bank lending, put that at 16%.

AjanleKoko:

So Idi-Amin-esque, printing money to finance debt.

Inflation rate is 13.6% and MPR is at 6.26% (from cenbank.org). For the bank lending, put that at 16%.

Yeah.
I don't think we are fiscally mature enough for QE.
It is a measure that can be abused - very easily!

It's bad that there are too many semi illiterates in Nigeria. I guess the functionally illiterate person that wrote this article does not know what "all time high" means. Nigeria's external dept alone was as high as $40 billion once, is that lower than $4.9 billion that it is now.

Quite and achievement by OBJ and Mr Go slow (RIP n Thank GOD)

I think if we read the statement properly it was not talking of just the federal governments debt. The state governments also borrow and that is what we really need to check. The sub-national borrowing is just too much.
Imagine how much the government of Bayelsa state has borrowed despite the allocation and revenue generated and the small population. Yet, the state is not really moving forward.
Thank God sub-national borrowing has to be approved by the FEC.

shew, even with our oil? watz happening naija?

na waoh!!!!!!!!!!!!!!

wtf? how does that service my own debt profilr that is wieghing me down?

Those who secure loans on behalf of the Nigerian people do not have the best of intentions.