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CBN Raises Interest Rate To 12%,Tightens Money Supply - Business - Nairaland

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CBN Raises Interest Rate To 12%,Tightens Money Supply by Adesiji77: 5:56pm On Mar 22, 2016

*Increases banks’ CRR to 22.5%
*Says excess liquidity driving forex speculation


In a bid to tighten money supply in response to the sharp increase in inflation in February, the Central Bank of Nigeria (CBN) Tuesday raised its Monetary Policy Rate (MPR) to 12 percent from 11 percent. The Bank also increased the portion of customers’ deposits that banks must keep as cash, known as the Cash reserve ratio, to 22.5 percent from 20 percent, while it retained the liquidity ratio (LR) at 30 percent.

CBN Governor, Mr. Godwin Emefiele, announced these decisions at the end of the Monetary Policy Committee (MPC) meeting held yesterday. Emefiele said that the decision to tighten money supply was because the balance of risk was against inflation.




http://www.vanguardngr.com/2016/03/cbn-tightens-money-supply-raises-mpr-to-12/

3 Likes 1 Share

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by kasmail(m): 5:56pm On Mar 22, 2016
Im in ketu

1 Like

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by alexory23(m): 6:21pm On Mar 22, 2016
O Lord have mercy on 9ja

2 Likes

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by Nobody: 6:52pm On Mar 22, 2016
when the economics guru decide to tackle Nigeria's economy problem with laws and principles in economics when the conditions in Nigeria doesn't even obey the simple laws of demand and supply.
sorry is the case...

23 Likes 3 Shares

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by yomalex(m): 6:52pm On Mar 22, 2016
Wow
Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by Nobody: 6:52pm On Mar 22, 2016
In this life learn to be independent. Please don't trust anyone no matter how friendly the person might be.Human beings are very unreliable,even the best person you lay your trust can be the person that might hate you. No matter how friendly a person is pls dont lay down you trust in him/her. seriously this adage that goes like this "THE DEVIL U KNOW IS BETTER THAN THE ANGEL YOU DON'T KNOW". Is really true.

54 Likes 5 Shares

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by lanre316: 6:52pm On Mar 22, 2016
Wait a minute. Is this interest rates mandated on loans you get from banks or interest on your savings/deposits in banks.

4 Likes

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by Elerineye01(m): 6:53pm On Mar 22, 2016
Godwin Emefiele... Kontinu...

3 Likes

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by kingreign(m): 6:53pm On Mar 22, 2016
Hmmm

1 Like

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by adonbilivit: 6:53pm On Mar 22, 2016
make inflation reduce small. oshey
Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by TippyTop(m): 6:53pm On Mar 22, 2016
This is stupidity.

6 Likes

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by datola: 6:53pm On Mar 22, 2016
Hmmm...

Waiting for arm chair Nairaland economists to analyse the import of the policies to the common man.

Wailers are welcome. This is democracy.

9 Likes 1 Share

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by dfrost: 6:54pm On Mar 22, 2016
Economists should help out here. How does this pan out for the common man on the streets?

5 Likes 1 Share

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by Joenyam(m): 6:54pm On Mar 22, 2016
This new policy may have positive and negative effects.
Firstly,
If the reserve requirement is raised, banks will have less money to loan out and this effectively reduces the amount of capital in the economy, therefore lowering the money supply. It will mean less money for investment and spending, and would stunt the growth of the economy. It would also mean that banks earn less interest and could see their share prices fall. Lowering the reserve requirement will have the opposite effect; banks will be able to lend more which would increase money supply and stimulate economic growth.

Secondly,
Raising reserve requirements can cause an increase in currency value because when banks are restricted in the amount that they can lend out, they may charge borrowers a higher rate of interest. This is bad news for borrowers, but good news for savers who can benefit from a higher rate of return on their savings. If more capital enters the economy to benefit from those higher interest rates, the value of the currency is likely to increase.

I don't know if we're to smile or cry or do both. I don't want to hear that there was a country. God help us!

30 Likes 4 Shares

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by bukynkwuenu: 6:54pm On Mar 22, 2016
wetin dey wan tight again.....d economy bin dey tight or dem no wan mk i see money chop morning "okpa"


chaii buharii

5 Likes

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by DickDastardly(m): 6:54pm On Mar 22, 2016
cheesy
Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by DBossNG(m): 6:55pm On Mar 22, 2016
What are the merits and demerits?
Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by kennyman2000(m): 6:55pm On Mar 22, 2016
Okay oooo

1 Like

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by StArusi: 6:55pm On Mar 22, 2016
Will this change affect interest rate on fixed deposit?
Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by Ecoplexus: 6:55pm On Mar 22, 2016
This will discourage investments and entrepreneurship as those looking for loans to set up businesses will be greatly affected.
Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by dyn1800: 6:55pm On Mar 22, 2016
Economist in the house should kindly explain the Good and Bad side of this policy

2 Likes

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by Icecomrade: 6:55pm On Mar 22, 2016
Bad
Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by lordcyl3(m): 6:56pm On Mar 22, 2016
which kind year be this... no single relief news since this yr

3 Likes

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by iyzeek(m): 6:56pm On Mar 22, 2016
.
Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by GudluckIBB(m): 6:56pm On Mar 22, 2016
Dharniel:
inflation, where is the inflation?
Emefiele no sabi as e dey go at all

But it was ur phd holder GEJ that appointed him

9 Likes

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by ednut1(m): 6:56pm On Mar 22, 2016
Trust nairalander to avoid this thread grin . Mpr was reduced we no see effect. Bank loans were still 22-24% . Mr Godwin d green tie man is confused abeg

1 Like

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by Clarinett(m): 6:56pm On Mar 22, 2016
It won't have any effect. Trust me

The current price level won't adjust with this policy of yours.
Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by Nobody: 6:56pm On Mar 22, 2016
I didnt understand what i jst read now. Help plz

1 Like

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by sankky: 6:57pm On Mar 22, 2016
Money no dey anywhere, u still de tighten liquidity to create more scarcity.
Anyway, what do I know?
Nigerians are in CHAINS sorry, CHANGE

1 Like 1 Share

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by vizboy(m): 6:57pm On Mar 22, 2016
Where are all of our economist

1 Like

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by misterchris(m): 6:57pm On Mar 22, 2016
Which other inflation pass the high jump abi na pole vault wey dollar dey do? Money no dey money no dey dem still dey tighten belt.

1 Like

Re: CBN Raises Interest Rate To 12%,Tightens Money Supply by davide470(m): 6:57pm On Mar 22, 2016
dfrost:
Economists should help out here. How does this pan out for the common man on the streets?
Errm. Let me help small before they come:

Banks won't be using more of your money to trade and make money for themselves..They will learn how to save too cheesy (CRR increased to 22.5% from 20%)

CBN will charge this when they lend to banks, so therefore, banks would fire it down to the layman.. In other words, go and look for your own money, and leave them alone (MPR increased to 12% from 11%)

If you by mistake check google and see that your bank's liquidity ratio (money to pay igbese) is below 30%, sharply go close your account. Them no get money to show off like that (Liquidity ratio at 30%)

Hope this helps.

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