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Nairaland Forum / Nairaland / General / Business / CBN Raises Interest Rate To 15.5% To Curb Rising Inflation (18440 Views)
CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels / CBN Raises Interest Rate To 18.75% / Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation (2) (3) (4)
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Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by Tonytonex(m): 3:49pm On Sep 27, 2022 |
Shadysen:e simply means say, if you want borrow money for bank, you go pay higher interest than before. Let's say for example you want borrow 1mill your interest go be like 160,000 |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by travelzcruix: 3:50pm On Sep 27, 2022 |
I still don't get the economy of Nigeria so well. In a country where as high as 70% live below the dollar daily. Even when it was a 150 naira. Where is the excess naira coming from? |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by DeOTR: 3:53pm On Sep 27, 2022 |
lasthero:Where exactly are you seeing the money in circulation? When most people can barely feed themselves? Our over dependent on imported goods is the reason for the rise in prices of commodities, not because there's too much money in circulation. Inflation and unemployment are supposed to move in different directions, which is not the case here. |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by gambojimeta: 3:54pm On Sep 27, 2022 |
Tonytonex:That's because Nigeria's economy is complex and regulations is lax plus the corruption in the system. In the obodo Oyinbo, when interest rate is increased, business and people will reduce their spending as they also need that money to service their debts obligations (remember lending and borrowing are very popular in those countries), so there are less money chasing few products. This helps slow down demand and also brings about a fall in prices of commodities; hence, reducing inflation. In the US, Canada and other advanced countries. The economy is overheated i.e. plenty of jobs, people have lots of money to spend, economies opening up too fast, so there are more money chasing fewer goods since there was supply chain issues because of covid. But we don't have the same in Nigeria, unemployment is extremely high, people don't have lots of money, Nigerian economy is not opening up because of covid (we weren't affected that much), Nigerian economy is not heating up, but the CBN is increasing interest rate anyway. The only reason I could think of is because of the exchange rate. Dollar is getting higher so it's being done to make buying the dollars less attractive. Perhaps, this will only apply to a few people in Nigeria as not many people in Nigeria buy dollars anyway aside those that school abroad or business men dealing with foreign export and import. 2 Likes |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by t2luv1: 3:56pm On Sep 27, 2022 |
nedu666: Nigeria is not suffering from Excess liquidity partner. When you have too much money in circulation chasing after a limited supply of services and goods that is excess liquidity. Last time i checked that does not seem to be the issue in that country. What that country is suffering from is artificial inflation created due to non-uniformity in the country's exchange rate. You sell Forex to the banks at 421 or 431. The freaking banks then turn around and sell to the Bureau De Exchange at 695. The spread is just too wide. Have you taken the time to read Banks' statement in Nigeria this past year? They are making out like bandits which they are actually in this context. Until this man is removed nothing will change. |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by Shadysen: 3:57pm On Sep 27, 2022 |
Tonytonex:gracias, our leaders wicked sha. 2 Likes |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by Nobody: 3:59pm On Sep 27, 2022 |
lasthero: Where is the excess money in circulation? If there is excess money in circulation, you will see it in workers being paid early, private sector making a kill and employing more hands and even the employees smiling. Educate my ignorance if this is happening right now. |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by BigBashiru: 4:00pm On Sep 27, 2022 |
gambojimeta: Those aren't advanced countries..... |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by Tonytonex(m): 4:00pm On Sep 27, 2022 |
Kaa4:true. |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by gambojimeta: 4:01pm On Sep 27, 2022 |
BigBashiru:Okay. They are developing countries. I hope you are happy now. 1 Like |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by Michealidowu1(m): 4:01pm On Sep 27, 2022 |
Deltavariant:I wish I could like this 10 times 2 Likes 1 Share |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by odaniel1(m): 4:04pm On Sep 27, 2022 |
t2luv1: God Bless your own reasoning! They simply yanked off the supply from the black market to create more demand for forex knowing it will affect pricing/value. Then buy with influence through proxies from thee banks and re-sell to black market dealers. Pathetic, selfish reasoning. |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by Nobody: 4:04pm On Sep 27, 2022 |
Vilgax: But this won’t work cos no savings. People can hardly feed. Private sector is suffering. Those who took loans can’t pay. Means of production is high and the cost of finished goods is beyond the reach of the common man. Wo! We should go the way of Turkey, if you ask me. Reduce interest rate, stimulate means of production and devalue. Atleast, stimulating the economy will create jobs and drive SME. But what do I know self? |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by Tonytonex(m): 4:04pm On Sep 27, 2022 |
Shadysen:very very wicked. They just want the common man to suffer. |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by GodsOwn2004(m): 4:09pm On Sep 27, 2022 |
Vilgax: Will this reduce cost of production? You need to understand the fact that the high cost of goods and services currently happening in Nigeria isn't demand driven. 1 Like |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by Agboriotejoye(m): 4:11pm On Sep 27, 2022 |
politicoNG: kahal29. You can see that Obi was right after all |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by gambojimeta: 4:13pm On Sep 27, 2022 |
Nigeria is a mysterious country. |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by t2luv1: 4:13pm On Sep 27, 2022 |
Tonytonex: I am going to let you in on a secret. Nobody cares about what the interest rate is in NIGERIA. so let us get that out of the way. Trying to get a loan from a Nigerian bank by an individual is close to impossible. Most banks commercial lending rate currently in Nigeria is around 33%. This 15.5% is actually the interbank lending rate. All banks by law are required to have a daily balance of reserves. sometimes a bank might need to borrow money overnight to meet this reserve this is where this interest rate number comes into play. I used to have Citibank as a client so I am well aware of this setup. 2 Likes |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by gambojimeta: 4:15pm On Sep 27, 2022 |
t2luv1:Alot of Nigerians actually use Microfinance banks. In a normal environment, interest rates on those loans will increase. 2 Likes |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by BigBashiru: 4:18pm On Sep 27, 2022 |
gambojimeta: They are infrastructurally advanced only.... |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by Sonoyom(m): 4:18pm On Sep 27, 2022 |
This he goat wants to curb cost push inflation by increasing interest rate These guys no wise at all. 2 Likes |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by t2luv1: 4:19pm On Sep 27, 2022 |
gambojimeta: Thanks, I need to look into the role of the Microfinance banks in that Country as it pertains to the Economy |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by overlord77: 4:19pm On Sep 27, 2022 |
Borntosmoke: Story for the gods |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by being(m): 4:25pm On Sep 27, 2022 |
They are basically just rearranging d problem rather than solving it because they cannot solve it. U reduce inflation & devaluation this way, purchasing power still remains unchanged at its low point.. Alexas58: |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by t2luv1: 4:29pm On Sep 27, 2022 |
odaniel1: This is a simple fix. Instead of selling 100% of Forex to the banks why not sell 20% to the banks @431 all the banks are using that 20% for is to meet their customers' foreign ATM usage anyway. The banks buy at 431 and sell their ATM usage at 497 which is what they are presently doing. The remaining 80% of Forex sell to the Bureau de exchange not at 431 but at 451 with the stipulation that they can only sell to the public at 520. They will still make N100 profit on every dollar sold. The exchange rate of 520 will still be better than the current rate of 705. The greediness of the banks is what is killing the economy in that country. |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by Nobody: 4:33pm On Sep 27, 2022 |
Kaa4:You are right ,the CBN governor is disastrious ,the increase in increase rate will not curb inflation in Nigeria because 1)Our Economy is not Robust 2)Demand and supply curve is quite abnormal 3) we have very low purchasing power in Nigeria This is what I can think of |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by baba4thegehs: 4:37pm On Sep 27, 2022 |
lasthero: What we're experiencing in Nigeria is self induced inflation. There is no money in circulation, the price of good and services are majorly increasing because of increase in cost of import, and constant devaluation of naira against the USD which apparently affects almost every other thing in the country. We all know Nigeria heavily relay on imports, increasing Interest rate without addressing the main issues will only deepen the effects of inflation to the average Nigerian. But obviously CBN governor doesn't understand the technicalities of the current economic crisis he resorts to text book practice when he should be advising the government on ways to the salvage the economy. 2 Likes |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by pinkasso: 4:41pm On Sep 27, 2022 |
Black man's economics is always annoying.... politicians are sharing billions amongst themselves ...too much money in circulation but not in hands of manufactures that will create jobs and boost the economy...you are giving Dangote and the rest tax holidays in critical time like this and keep squeezing the common man until they die by killing SME's....old men with sticky fingers SMH. politicoNG: |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by dexmond: 4:46pm On Sep 27, 2022 |
Looks like our CBN is using 1939 monetary policies. Our current inflation is not as a result of too much money in circulation. It is driven by other exogenous factors. They should stop punishing Nigerians for being Nigerians. |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by WhizdomXX(m): 4:46pm On Sep 27, 2022 |
Ex0rrcist:They shouldn't devalue it now. |
Re: CBN Raises Interest Rate To 15.5% To Curb Rising Inflation by drealcivilceno(m): 4:47pm On Sep 27, 2022 |
Alexas58: How if I must ask? 1 Like 1 Share |
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