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Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? - Business - Nairaland

Nairaland Forum / Nairaland / General / Business / Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? (31942 Views)

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Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Ebookmathswaec: 8:17am On Oct 11, 2017
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.

20 Likes 6 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by seunmsg(m): 8:24am On Oct 11, 2017
Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.

Cc: Seun, OAM4J, Mynd44

You want to print another country's currency?

273 Likes 25 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by sorextee(m): 8:25am On Oct 11, 2017
Very funny question.. Even the naira sef, we cant just be printing it anyhow..
it would lead to inflation, the money no go get value. more money chasing fewer goods.

138 Likes 8 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Ebookmathswaec: 8:26am On Oct 11, 2017
seunmsg:


You want to print another country's currency?

No. I mean Naira equivalent.

76 Likes 5 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by thesicilian: 8:42am On Oct 11, 2017
Ebookmathswaec:


No. I mean Naira equivalent.
Somehow makes sense.

25 Likes 2 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Adeyinka12(m): 8:45am On Oct 11, 2017
following.... jejely
Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by malton: 8:48am On Oct 11, 2017
Ebookmathswaec:


No. I mean Naira equivalent.

Because printing such a huge naira amount would result in inflation.

113 Likes 3 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Ebookmathswaec: 8:50am On Oct 11, 2017
malton:


Because printing such a huge naira amount would result in inflation.

And borrowing the same huge amount won't do same?

171 Likes 7 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by 1freshdude: 8:50am On Oct 11, 2017
Money is valuable because it is relatively scarce, the level of productivity in a country is always put into consideration before taking this decisions, else money loses value, it becomes worthless and an alarming inflation ensues. Zimbabwe is a good example of what printing more money in the face of very low output can cause.

148 Likes 9 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by malton: 8:56am On Oct 11, 2017
Ebookmathswaec:


And borrowing the same huge amount won't do same?

No, it would not, as government borrowing does not create new money. There are a lot of technicalities involved.

This particular borrowing is aimed at maintaining foreign exchange rate figures.

32 Likes 3 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by JAkpayen(m): 9:00am On Oct 11, 2017
@OP,

Look at it from this angle: If every Nigerian is given access to print his/her money to use for buying or paying debt, what do you think will happen to the economy?

There is no reason why it is not technically possible but the naira will become junk and a piece of tissue paper will be more valuable than that.

Basically, the naira is only valuable if it's scarce, because we use it to procure scarce resources.

116 Likes 5 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Nobody: 9:03am On Oct 11, 2017
Foreign companies don't transact in naira, but dollar.

8 Likes

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Truckpusher(m): 9:05am On Oct 11, 2017
1freshdude:
Money is valuable because it is relatively scarce, the level of productivity in a country is always put into consideration before taking this decisions, else money loses value, it becomes worthless and an alarming inflation ensues. Zimbabwe is a good example of what printing more money in the face of very low output can cause.
Print the goddamn thing and before the West will wake up and suspect anything you've already used it in buying shares, gold, companies from their economy while bringing in policies that will lure their investors down here with the promise of cheap labor and wait till everywhere is calm.

Haven't you heard about currency manipulation by China that America keeps crying about while they are the chief currency manipulators. grin

120 Likes 10 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by bakynes(m): 9:08am On Oct 11, 2017
1freshdude:
Money is valuable because it is relatively scarce, the level of productivity in a country is always put into consideration before taking this decisions, else money loses value, it becomes worthless and an alarming inflation ensues. Zimbabwe is a good example of what printing more money in the face of very low output can cause.
Exactly, what I was going to say but to expaintiate more in lay terms, if you produce products and services worth $1m dollars and you print $5m dollars that means you are putting too much money in the hands of individuals for $1m dollars worth of productivity, this will now bring about inflation. Because the seller knows you now have money he will charge you whatever he offers(either goods or services)5X more so the cost of goods and services will sky rocket and inturn devalues your local currency. It simply an economics principle.

47 Likes 5 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by abescom: 9:09am On Oct 11, 2017
thesicilian:

Somehow makes sense.
Makes no economic sense. It will lead to massive inflation and worsen the economy.

16 Likes 2 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by spokesboy: 9:09am On Oct 11, 2017
Ok
Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by lonelydora: 9:10am On Oct 11, 2017
Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.


When i was in primary 4, i used to think like you. Which school did you graduate from?

Even if it's naira we are seeking for, we can't print it because it will lead to what we call INFLATION

29 Likes 3 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by nairavsdollars(f): 9:10am On Oct 11, 2017
Invitation to inflation

6 Likes

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by itiswellandwell: 9:10am On Oct 11, 2017
Hmmmmm.. Lemme learn.

Check my signature for ongoing promo of our full capacity powerbank

1 Like 2 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Built2last: 9:10am On Oct 11, 2017
lol

1 Like

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Brugo(m): 9:10am On Oct 11, 2017
What a question!

Okay, even if I would answer you. You want to turn us to zimbabwe? You will flood the economy with cash. Inflation will ravage our economy and our money will become worthless. Besides, have you thought about the cost of printing the naira equivalent?

Anyway, I want to believe you're just pulling our legs.

7 Likes 3 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by donqx: 9:10am On Oct 11, 2017
hmmm
Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by dionysus7: 9:10am On Oct 11, 2017
Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.


Please be kidding

11 Likes

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Nobody: 9:11am On Oct 11, 2017
Ebookmathswaec:
Why can't we print the $5.5bn ourselves instead of borrowing since we can print money ourselves?

I believe if we print the money ourselves, we can use it for whatever we want and we won't need to pay back money to anybody.

Nairalanders pls! I need explanation.


Because....inflation

Many often ask why government’s don’t print more money to deal with the problem of national debt.

The reason is that printing more money doesn’t increase economic output in any way – it merely causes inflation.

Suppose an economy produces £10 million worth of goods; e.g. 1 million books at £10 each.
If the government doubled the money supply, we would still have 1 million books, but people have more money. Demand for books would rise, and firms would push up prices.
The most likely scenario is that if the money supply were doubled, we would have 1 million books sold at £20. The economy is now worth £20 million rather than £10 million. But, the number of goods is exactly the same.
We can say that the increase in GDP is a money illusion. – True you have more money, but if everything is more expensive, you are not any better off.
In this simple model, printing more money has made goods more expensive, but hasn’t changed the quantity of goods.
[left][/left]

https://www.economicshelp.org/blog/634/economics/the-problem-with-printing-money/

See what happened in ZImbabwe and Germany 1919-24

32 Likes 2 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Ochasky23(m): 9:11am On Oct 11, 2017
You want the naira to be like the Zimbabwean dollars right. If too much money is in circulation, it leads to inflation. You could even buy a loaf of bread for 200k

10 Likes 2 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by sunnyside16(m): 9:11am On Oct 11, 2017
Hahahahahahahahaha i am wondering too.
Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Cloud007: 9:11am On Oct 11, 2017
guy...printing more money does not nessarily mean inflation but wen CBN over does it. see its a NO NO for nigeria cos of who we are. we will continue to print until it super dwafed the rate of GDP growth. zimbawe inflation will be a child's play wen we are done with ourselves

4 Likes

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Feranchek(m): 9:11am On Oct 11, 2017
I been tink sey you dey joke o! So you really mean am! Nna kamdan biko

3 Likes

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by eponoloyin: 9:11am On Oct 11, 2017
The cost of printing nko? or you think it's A4 paper they use

24 Likes 3 Shares

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Nobody: 9:11am On Oct 11, 2017
Okay
Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by code11(m): 9:11am On Oct 11, 2017
OMG!

Inflation will kill off the country if that happens. Monetary policy is a slightly dicey thing.

6 Likes

Re: Foreign Loan: Why Can't CBN Print The $5.5bn Instead Of Borrowing? by Adeoba10(m): 9:11am On Oct 11, 2017
Inflation will occur... Money will not have value..... For example, you need 5k, you went to your photocopy machine and printed it out, if you get to the market and they called toothpick for you at d rate
Of 3000naira, you will just pay them and leave bcus you have d printing machine @ home. Look at Zimbabwe for another example....

7 Likes 1 Share

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