I read somewhere on Facebook that, one of the reasons England is facing economic challenges, is as a result of the excessive money printed during Covid-19 lockdown in 2020.

The embargo placed on them by Russia, only serves as a catalyst for the hyperinflation of commodities.


So here is my question, how does printing excessive money, worsen the economy of a country?

Take for instance, Nigeria's GDP stands at roughly $400b if I'm not mistaken. What happens if CBN prints above what is needed? In what ways will it affect us?

I just need some clarity.

thegadgettrend:
I read somewhere on Facebook that, one of the reasons England is facing economic challenges, is as a result of the excessive money printed during Covid-19 lockdown in 2020.

The embargo placed on them by Russia, only serves as a catalyst for the hyperinflation of commodities.


So here is my question, how does printing excessive money, worsen the economy of a country?

Take for instance, Nigeria's GDP stands at roughly $400b if I'm not mistaken. What happens if CBN prints above what is needed? In what ways will it affect us?

I just need some clarity.

To fully grapse the effect of printing excess currency, I will have to take you through some micro economics. But let me make it simple by using demand and supply that we all know.

If the central banks decides to print excess Naira and injects such into the monetary fluid of the country through commercial banks and govt. handouts like covid relief funds and the likes... This is what happens;

We tend to have excess supply and wit excess supply, comes a depreciation in value... Cos scarcity increases value while excess supply reduces value.

dawnomike:
To fully grapse the effect of printing excess currency, I will have to take you through some micro economics. But let me make it simple by using demand and supply that we all know.

If the central banks decides to print excess Naira and injects such into the monetary fluid of the country through commercial banks and govt. handouts like covid relief funds and the likes... This is what happens;

We tend to have excess supply and wit excess supply, comes a depreciation in value... Cos scarcity increases value while excess supply reduces value.

Thanks