yjgm:
Today is my birthday

Happybirthday dear wllp

do you understand what the whole write up is all about? or Just to comment?

jerusalem101:
This Country is in deep Shit!!!



All we need now is prayer, cause it's obvious these guys at the top are bereaved of ideas.

they r preaching made in naija, if the manufacturers do their jobs, flood the market with madeinnaija products, where nigerians go get money buy the goods?
tightening monies instead of flooding the economy with money.
una go lock money till it grow weed on it, at last na one sharp man go still clear d weeds spend d money well.

At this point, there is no easy way out of this quagmire Nigeria has found itself in.

Basically, an increase in rate of inflation somewhat means there is too much money in circulation hence the hike in MPR so as to mop up excess liquidity. That is the textbook solution to an increase in inflation but unfortunately when things have gotten this bad, the conventional method to solve the problem either fails or takes long to see tangible result.

To me, these economic solution that is being administered by CBN is based on trial and error as recommended by textbooks which doesn't put into consideration the peculiar nature of Nigeria.

Although, we shouldn't cry yet as this will be a temporary policy. At the next MPC meeting, the rates may fall again as witnessed at the meeting earlier in the year.

From my little knowledge of economics,inflation is mainly caused by excess money in the economy but that is not the case with Nigeria.the fall of price of crude oil in international market has drastically reduced nigeria income.This has lead to shortage of forex and since nigeria import almost everything it has lead to hike in price.what i don't understand is why CBN is applying this measures because it may will lead to an increase in unemployment rate,inflation and shotdown of businesses.
This won't solve anything.

hush15:


What do you call a situation where you pump in 350billion and the make a withdrawal of 744billion?

It's called State of Confusion...


Most Cluessless Government Eva

Even worse when you withdraw yet billion then give back 350billion.
These guys on a macro-scale are making 100% profit in our head.

Emekamex:
This policy is counter productive. The reason for high inflation in Nigeria is basically due to very short supply of goods due to the forex prohibition and not from high circulation of money; retracting money from the economy will make people even more poorer and unable to buy goods which in turn will kill businesses, factories and establishments which relies on these people to sell their products.

I don't agree with totally on d cause of inflation. I think it's both demand pull & demand push inflation.

dyn1800:
do you understand what the whole write up is all about? or Just to comment?

Obviously majority don't understand the whole write up.

biogbruski:
Hmmm pulling out monies from circulation when nigerians arnt even seeing the monies to spend. I wonder what economic team we have in this country.

u get sense. where is d money sef? cost of production has jerked up and is affecting d price of basic commodities in d market because even our real income has not increased to match the increase in d price of goods

Emekamex:
This policy is counter productive. The reason for high inflation in Nigeria is basically due to very short supply of goods due to the forex prohibition and not from high circulation of money; retracting money from the economy will make people even more poorer and unable to buy goods which in turn will kill businesses, factories and establishments which relies on these people to sell their products.

You are correct.
Brilliant deduction.

yjgm:
Today is my birthday

[size=20pt]HAPPY BIRTHDAY [/size]

Funshorrh:
the whole story...ah dont even know

can someone pls explain beta
is it affecting the price of recharge card?

na recharge card u dey chop?

Quakertellicus1:
I suspect CBN wants to reduce inflation somehow...by mopping up excess.(Flawed thinking...but yeah).

Also, the government is out of cash. Because oil money is not flowing in....the government has to take this measure to balance the books...and hope that we do not go broke later. In other words...they are saving the cash.

In my opinion, good. Either oil goes up to 123 dollars per barrel....or nothing. We have to save cash anyhow.

its like someone saving money to buy a car meanwhile his family is been thrown out of school cos of lack of fees, he is at the verge of being evicted from his house due to rent, and his children go to bed hungry. yet he is saving to buy a car!
we r back to our forefather's era courtesy buhari!

Integrityfarms:
I was asking what's the need for stashing up trillions in the CBN vault without injecting it into the economy especially at such a hard time. Expansionary Fiscal and Monetary policy is always recommended in economic situations like this. But no time is too late shaa!

Expansionary fiscal AND monetary policy after inflation had jumped from 9.6% to 11.4%? Where did you get your economics degree from?

Chukzyfcb:
Rather than wail shout and curse at the impending difficulties....if you have money that's been lying in your savings account doing nothing, Now its time to either Invest in T-bills/f.deposit.....ask for the Best possible rate & let your money bear fruits for you while you sleep. #Rather than wail, be wise and forge ahead!!!

Can u pls tell me hw to do dt?

Quakertellicus1:
I suspect CBN wants to reduce inflation somehow...by mopping up excess.(Flawed thinking...but yeah).

Also, the government is out of cash. Because oil money is not flowing in....the government has to take this measure to balance the books...and hope that we do not go broke later. In other words...they are saving the cash.

In my opinion, good. Either oil goes up to 123 dollars per barrel....or nothing. We have to save cash anyhow.

You have definitely got it wrong. Don't just defend because you are a supporter of present day government. How does government saving money now affect you and I? In Nigeria, the system has made every family it's own government because from housing to security to education to medical is provided by you and I. So this saving makes no sense bro. It will only make sense when and if we are provided basic amenities like in the western world.

These people get sense so? Last week Minister of Finance said government would be injecting N350 billion naira into the economy now CBN is pulling N1 Trillion out #MadPeople

SleekAlmajiri:
Due to its new monetary policy drive the Central Bank of Nigeria, CBN, may be pulling out up to N1.0 trillion from circulation in the economy through the banking system in the first month of its new monetary policy.
Already N525 billion has been pulled out less than one week after the policy which seeks to tighten money supply, while additional N219 billion is slated to be pulled out next week, just as banks’ treasury executives said they were preparing their treasury plans for more mop ups estimated to be up to N300 billion within the next three weeks.
The apex bank had last week announced a reversal of its expansionary monetary policy which it had run for eight months, in favour of contractionary measures under which the Monetary Policy Rate, MPR, was increased to 12 per cent from 11 per cent while Cash Reserve Requirement, CRR, was hiked to 22.5 per cent from 20 per cent.
Both rate increases would effectively increase interest rates, cost of funds and yields on money market instruments floated by the apex bank while transferring huge cash from the banking system into the government vault.
Of the N525 billion already pulled out, about N410 billion was quarantined in relation to the new CRR, while N115 billion was pulled out into Nigerian Treasury Bills, NTB, and with another N219 billion slated for mop up next week in NTB, the apex bank would have taken out a total of N744 billion by end of next week.
http://www.vanguardngr.com/2016/03/new-monetary-policy-pulls-n744bn-circulation/

lalasticala obinoscopy mynd44

Bawsse:


Can u pls tell me hw to do dt?

Its not rocket science. For fixed deposits, the rates are steady rising currently about 5-6.5% per annum
So if you have like 2million naira lying idle. Walk into any bank and ask for their rate ,at a 5% rate you'll get 100,000 gross profit or more depending on the rate offered from your bank.....For t.bills(treasury bills) visit this thread www.nairaland.com/878880/treasury-bills-nigeria....you'll find all you need there

5starmilitant:
Make una See me See wahalaoooo,
I went for the burial of a friends grand dad somewhere in Kogi, & in that village, when someone dies, an elderly man will come up and tell whose next to die. So this man came along and said that the next person whose going to die, is the one who decides to leave the burial ground first. My people, since last week I stil dey dia o. nobody wan 1st go oo, everybody just lie down, Even the old man at age 112 years is lying down beside me,is asking me if my people go never start to look for me?
As am talking to u now. Am still lying down What should I do next?

Guy, what did you smoke

KENZYYONG:
...bro you are talking about injection of excess cash into the economy
..mind u naija is already experiencing inflation due to the high rate of cash flow both by banks and government and now we suffering from that cos the cbn has already enacted policies to mop up d excess cash in d economy... We call it OMO in economics meaning open market operation....d S.T.A, reduction on the interest rate for placements by banks, and individuals as well and most importantly new fiscal policy are all the means through which d apex banks treats the problem of inflation... Although it will affect us initially...but the effect is short-term but the benefits are long-term

Mr economist, I'll like to have yu know that the cause of our inflation today is not because banks were pumped huge liquidity because of the TSA policy that affected them.... When CBN pumped liquidity into the banking sector it did so, so banks could stimulate growth in the economy by lending to individuals in the SME's. But did it work , NO!!! Our countrys GDP growth has been dropping every quarter. Currently @ 2.8%.....How does raising interest rate improve the prices of commodoties in the market? The effects are not long term. Until CBN address our forex issue, this is just a "try ur luck approach" as they have always done! But for investors like me, its good news coz Tbills rate and f.deposit will shoot up!

Who else has noticed that 200 naira note is scarce?

DivaFiva:

This would reduce the amount of money in circulation, although prices will fall by a relatively small percentage, the productivity of economy is bound to reduce...this will cause supply of goods to fall because people are not producing as much as they could have with easier accessibility to loans. It could reverse the early effect of the reduced money in circulation and hike prices for certain goods especially goods that are imported or made with imported materials. As you are aware, that means everything!

The increased bank reserve will reduce funds available for loans. While this could be an attempt to reduce the supply of money to control inflation, it would mean less business start ups and more unemployment and higher interest rates.

Basically, we are fvcked!

How is this going to affect the interest of customers' money in the bank?

Is it going tn reduce the interest of money deposited in savings and current account?

Emekamex:
This policy is counter productive. The reason for high inflation in Nigeria is basically due to very short supply of goods due to the forex prohibition and not from high circulation of money; retracting money from the economy will make people even more poorer and unable to buy goods which in turn will kill businesses, factories and establishments which relies on these people to sell their products.

this is what happens when you use local breeds to manage the economy. The current finance minister is a local breed (yes I said, you heard me right I said it) she is, how on earth would you give a state commissioner of finance a huge portfolio as this, not just any other day Buh this critical period in this nations history. That is why she and the clueless CBN gorvenor would be there experimenting with policies, no clear policy direction.

God I dunno how we had it this rough, Nigerians were in frying pan, now buhari and his gullible followers have plunged us into the furnace.

recently the bread seller increased her price because 'dollar is expensive'. with this new policy she would have to reconsider the increase when she makes less sales with less money in circulation. alternative cheaper sources would be sought.

valdovas:

How is this going to affect the interest of customers' money in the bank?

Is it going tn reduce the interest of money deposited in savings and current account?

Theoretically, this would increase the market interest rate of money deposited or invested.
While, this is good for lenders, it is bad news for borrowers.

DivaFiva:


Theoretically, this would increase the market interest rate of money deposited or invested.
While, this is good for lenders, it is bad news for borrowers.

Phew. Thank God.
Thank you for explaining.

bigtt76:
These people get sense so? Last week Minister of Finance said government would be injecting N350 billion naira into the economy now CBN is pulling N1 Trillion out #MadPeople

Dem get sense dem know wetin dem dey do.playing with the future of Nigerians. Injecting and pulling out much needed money. Co fused. Com if U ask me.

DivaFiva:


Theoretically, this would increase the market interest rate of money deposited or invested.
While, this is good for lenders, it is bad news for borrowers.

Well only rich people borrow money from the Banks anyway. The banks in Nigeria wont loan the average person.

erico2k2:

Well only rich people borrow money from the Banks anyway. The banks in Nigeria wont loan the average person.

True. And that's a shame.
First, the money borrowed helps put money in the system that the "average" would eventually get through selling stuff or would expand the rich businesses thus giving the "average" man job. So it is not as good or irrelevant to Us as average people as you think.

NavierStokes:
A government at war with itself, CBN monetary Policy is mopping up liquidity, finance ministry's fiscal policy, stimulate the economy by implementing an expansionist budget and pumping in money into the system. These guys are at a tug of war with them selves pulling the economy apart at opposite ends. Now finance ministry is putting 350 billion into the economy and CBN is mopping up almost 1 trillion so what is the net result?

Nigerians better get on your knees to pray because the shit is getting "realer"

hahaha

so true!