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Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation - Business (3) - Nairaland

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Crypto King, Sam Bankman-Fried Sentenced To 25 Years In Prison / CBN Raises Interest Rate To 15.5% To Curb Rising Inflation / CBN Raises Interest Rate To 14% (2) (3) (4)

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Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by teejoyz: 4:02pm On Jul 03, 2023
High interest rate will lead to high cost of production which will finally lead to cost push inflation.

1 Like

Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by sammirano: 4:08pm On Jul 03, 2023
Kobicove:


You can't have price ceiling in a free market economy

There are no perfect free market government regulations can always be activated. That's why we have consumer protection
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by gabbytabby: 4:11pm On Jul 03, 2023
They should show us by starting it in their own country anofia
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by BreconHills(m): 4:12pm On Jul 03, 2023
nlfpmod:


https://businesspost.ng/economy/inflation-bank-of-america-urges-nigeria-to-hike-interest-rate-to-25/?amp=1

Nigeria's Inflation is largely import/fx led. How does raising interest rates address this? How does shrinking growth address high unemployment?

And if you want to mop up money Government can issue bonds or raise bank reserve ratios at the very worst.

I disagree with higher interest rates.

Modified

1 Like

Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by Manna4Gurls: 4:13pm On Jul 03, 2023
They should advice Biden first to save the stumbling America for saving others
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by AlphaStyles(m): 4:21pm On Jul 03, 2023
trueking:
If you don't have up to 500 naira now you can't eat to your satisfaction in a restaurant.
which yeye 500naira? Oga talk of 1000 naira above.
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by obedience4(m): 4:24pm On Jul 03, 2023
lonelydora:
US should focus on their gun control issue and stop chucking mouth in wetin no concern them.

US should know we are bette off with China and Russia. BRICS is coming


Yet South Africa that a member of Brics is suffering economically,
Take a careful look at SA economy you will be glad you are nigerisny

1 Like

Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by airsaylongcome: 4:24pm On Jul 03, 2023
TBH, it's sad reading all the obidients responses of negativity here. While I did not vote for Jaga on February 25, I would no categorize myself as an Obidient. Primarily because the massive "attacks" coming from that camp is not something I identify with. It's Okay to be opposed to BAT, but resorting to insults and social media intimidation will not get us the results we need, which is a better Nigeria for all of us long suffering Nigerians. I'm in full support of the tribunal and all other legal means challenging the Tinubu election. But I'm also in full support of any decision by the FG that will ultimately result in the betterment of our lot.

I'm also not in support of the several "attacks" from "On your mandate we shall stand" folks. EU gave a scathing report of our 2023 elections and you all are denigrating the EU because the report doesn't portray your principal in good light. With BAT being una to secure over 50% of the voting electorate, it says a lot about his nationwide acceptance. It would be better if the "Mandate standers" use diplomacy to win over doubters rather than slamming every criticism they get

BoA has given its analysis of our financial prospects. The incumbent administration needs to focus on minimising the negative impacts of its decisions, and ensure that economic policies that are favourable to us, common Nigerians, are what is paramount in whatever decision they make.

We have suffered to much as a people for anyone of us to continue to wish us bad luck.

God continually bless the Federal Republic of Nigeria. It's the only place I know as home
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by Ifypros: 4:27pm On Jul 03, 2023
Evil suggestion
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by airsaylongcome: 4:27pm On Jul 03, 2023
BreconHills:


Nigeria's Inflation is largely import/fx led. How does raising interest rates address this? How does shrinking growth address high unemployment?

And if you want to mop up money Government can issue bonds or raise bank reserve ratios at the very worst.

I disagree with higher interest rates.

Modified

With the changes so far, rates have been defying economical logic. With a spike in inflation, the standard tool to mop up money is to increase interest rates. Are you saying there are other proven solutions other them raising interest rates?
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by davidtemi(m): 4:28pm On Jul 03, 2023
trueking:
If you don't have up to 500 naira now you can't eat to your satisfaction in a restaurant.
So 500 naira still satisfy u... Ur side/area is good o
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by airsaylongcome: 4:38pm On Jul 03, 2023
Kalvan:


This is the pov I’ve been searching the thread for. Hiking the interest rate is a useful tool when inflationary pressures are caused by excess liquidity, but Nigeria’s inflation is almost entirely caused by supply side disruptions.


I'm a techie so forgive my secondary school knowledge of Economics. Wouldn't FDI need to see "interesting" returns for them to bring in money in order to ease the supply side pressures?
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by 9jaRealist: 4:39pm On Jul 03, 2023
lonelydora:
US should focus on their gun control issue and stop chucking mouth in wetin no concern them.

US should know we are bette off with China and Russia. BRICS is coming
iammo:
Americans should focus on thier own banking crisis

High intrest rate, which will make entrepreneur drive prices of goods up

Silicon valley bank, Signature bank , just collapsed with people's deposit they are giving us useless advise

Imagine, I sell bags of rice, and my capital is borrowed from a bank at 28% intrest rate for 1,000,000 now if Banks listens to US and up it to 35% is it not my customers that I will spread the intrest on

Americans (or other foreigners) will NOT “focus on thier(sic) own banking crisis” if you Nigerians want foreign investment… cool
>
PS: Btw, NO depositor lost a single dollar following SVB’s collapse (even those whose accounts are more than the $250k FDIC limit).
>
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by jimter44(m): 4:39pm On Jul 03, 2023
What Mr Tatonga Rusike is saying about a hike in Nigeria's interest rate is true. If the CBN hikes interest rate, it will discourag many people from borrowing money from the banks bc of high interest rate. This is bc most of these borrowings are not for investment purposes, but for consumption or ostensious life style that triggers a skyrocketing inflation. With a higher interest rates, it will be only businessmen who want to invest that will borrow money from the banks and the money in the economy will reduce thereby bringing down the prices of goods and services. A classical example is during the naira swap or naira redesign when prices of most commodities reduced as result of scarcity of naira.
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by JoshTim: 4:40pm On Jul 03, 2023
Hiking interest rate will mean one thing, higher cost of borrowing translating to relative lower prices(when compared to past prices in recent times, not all time low), and scarcity of funds to meet basic needs. This is suicide in disguise. We must understand that demands causing inflation exists from the point of reference of meeting basic needs, it's that bad.

So, rising interest cannot be the solution. The real solution is in the real sector-Diversify the economy to Agric in the short term to long term.

Focus on meeting local production of foods and export excess in the short term to long term

Diversify to industrial growth in the long run.

Anything short of this, we will continue to be in a cycle.

1 Like

Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by ukaface(f): 4:41pm On Jul 03, 2023
chatinent:
Special greetings to awon “this government will favour me and my family.“

How is the family?


Ina kwana, ụtụtụ ọma o, e kaaro o! Day just break!


Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by 9jaRealist: 4:44pm On Jul 03, 2023
jimter44:
What Mr Tatonga Rusike is saying about a hike in Nigeria's interest rate is true. If the CBN hikes interest rate, it will discourag many people from borrowing money from the banks. This is bc most of these borrowings are not for investment purposes, but fir consumption or ostensious life style that triggers a skyrocketing inflation.

Nigeria’s inflation is largely caused by high cost of imported inputs (due to the weak Naira), and not primarily because of money supply…
Dilemma is that to attract more forex to strengthen the Naira, then you have to have POSITIVE interest rates (ie, higher than inflation rate).
>

1 Like

Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by adebayo987: 4:45pm On Jul 03, 2023
nlfpmod:


https://businesspost.ng/economy/inflation-bank-of-america-urges-nigeria-to-hike-interest-rate-to-25/?amp=1
Emefiele men don dey show.
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by 9jaRealist: 4:47pm On Jul 03, 2023
DOptical:
Tinubu is an economist. He knows what to do. I think We need more Forex savings. We already got some of our debt relieved by the removal of fuel subsidy.

Meanwhile, I hope all the CBN officials are removed, including the promoted Shobinu guy. They're in affiliation with Emefiele. When corruption is already deep neck in an establishment, it would be difficult for them to stop, best way is to remove all of them and replace them.. Heck, Emefiele knew why he handed over to the Shobinu guy. All of them are in collude.

The problem of Nigeria is corruption at its peak. I hope immunity is removed from all government officials and anyone found looting is jailed!

Tinubu is an accountant (a bean-counter), not an economist…
>

1 Like

Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by Dijita: 4:48pm On Jul 03, 2023
This is the reason you have to know the subject matter before you use chatGPT. While the explanation is correct, the explanation is contrary to the reason government increase interest rate. In monetary policy, government raise interest rate to decrease the supply of money in the economy. When there is less supply of money the demand for good and services will go down. when demands go down price go down.

In your chatGPT scenario, A rise in interest rate will result in the parent not making much money because there is less demand for what they are selling. Because they are making less money they will reduce his or her allowance and as such will reduce the quantity of goods she can buy with her allowance. Given that Sellers wanted to sell more goods ( when supply is more than demand prices fall), they will reduce their prices which reduces inflation.

In the case of BOFA, they are recommending increase in interest rate which in a country with high unemployment and majority of the workers are sustaining their income through bribery and graft. This is not likely to reduce inflation. Nigeria inflation is not as a result of over supply of money as a result of over dependent on imported goods. Instead of increasing interest rate I will recommending increasing import duties and products that can be produce locally.





exstreve:
I asked ChatGPT to explain Interest rate hike like I'm an 8 year old to some who may not understand, I do cos I trade stocks and crypto, well, here is the answer.

Well, imagine you have a piggy bank where you save your allowance money. Every once in a while, you decide to give yourself a little treat and take out some money from your piggy bank. But what if you notice that your parents start giving you more money as your allowance?

You might think, "Yay! Now I can take out more money from my piggy bank and buy even more treats!" That's kind of what a rate hike is like.

You see, when the government or a bank decides to hike, or increase, interest rates, it means they are giving more money to people. When people have more money, they tend to spend more, just like you would if you got a bigger allowance.

But why would the government or a bank do that? Well, sometimes they want people to spend more money to help businesses grow and for the economy to become stronger. When businesses grow, they can employ more people and create more jobs.

On the other hand, if the government or a bank decides to lower, or decrease, interest rates, it means they are giving people less money. In this case, people might decide to save more money instead of spending it because they aren't getting as much from their allowance. So, it's like having a smaller allowance and not being able to buy as many treats.

Rate hikes can affect many things, like how much it costs to borrow money or get a loan. When rates go up, it might become more expensive for people to borrow money, and they might not want to spend as much or take out loans to buy big things like houses or cars.

So, similar to how your allowance can affect how much you can spend on treats, rate hikes affect how much people can spend and can also influence the overall economy.

2 Likes

Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by DOptical: 4:49pm On Jul 03, 2023
9jaRealist:


Tinubu is an accountant (a bean-counter), not an economist…
>

Business administration degree, majored in accounting.

Best student of his set sef.
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by 9jaRealist: 4:53pm On Jul 03, 2023
DOptical:
Business administration degree, majored in accounting.

Best student of his set sef.

Business administration is NOT synonymous with economics…

Business administration focuses on the micro and not the macro…
It is how to run/manage businesses (micro), not how to run/manage economies.
>

1 Like

Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by DOptical: 4:55pm On Jul 03, 2023
9jaRealist:


Business administration is NOT synonymous with economics…

Business administration focuses on the micro and not the macro…
In other how to run/manage businesses (micro), not how to run/manage economies.
>

Isn't Emefiele an economist, what has he achieved apart from being the worst CBN ever? You dey craze? Tinubu turned Lagos revenue around to what it is today! And yeah, Tinubu is far better as a top degree business administrator!
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by 9jaRealist: 5:00pm On Jul 03, 2023
DOptical:
Isn't Emefiele an economist, what has he achieved apart from being the worst CBN ever? You dey craze? Tinubu turned Lagos revenue around to what it is today! And yeah, Tinubu is far better as a top degree business administrator!

There are good economists and bad economists…
Just as in any other profession, a certificate doesn’t translate to practical knowledge.
>

1 Like

Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by Elliotwaveforec: 5:01pm On Jul 03, 2023
Thieves! They want us to continue using our revenue to service debts.

I trust my president, interest rates are going to crash significantly; we may even embark on a negative interest rate regime like it was done in the Eurozone.

Hike in rates in Nigeria can never curb inflation! Emeffy did it, prices never came down.

A country like Nigeria needs to prioritise growth over price stability.
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by naturefellow(m): 5:02pm On Jul 03, 2023
TemplarLandry:
Hope Mr. Rusike knows what he's saying.
What do you know besides defending criminality?
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by Offpointng: 5:03pm On Jul 03, 2023
DOptical:
Tinubu is an economist. He knows what to do. I think We need more Forex savings. We already got some of our debt relieved by the removal of fuel subsidy.

Meanwhile, I hope all the CBN officials are removed, including the promoted Shonubi guy. They're in affiliation with Emefiele. When corruption is already deep neck in an establishment, it would be difficult for them to stop, best way is to remove all of them and replace them.. Heck, Emefiele knew why he handed over to the Shonubi guy. All of them are in collude.

The problem of Nigeria is corruption at its peak. I hope immunity is removed from all government officials and anyone found looting is jailed!

i just checked, the Acting CBN governor Shonubi happen to come from SW and fortunately na our person mai we pity am allow am do this 4years with Tinubu abeg
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by Reference(m): 5:04pm On Jul 03, 2023
We have been screaming for action to tackle inflation since subsidy removal and no one is listening. It has to take foreign institutions to tell Nigeria what to do to prevent serious economist disaster.... and you wonder how Nigerians are called informed, sensible or even brilliant....??
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by DOptical: 5:06pm On Jul 03, 2023
Offpointng:


i just checked, the Acting CBN governor Shonubi happen to come from SW and fortunately na our person mai we pity am allow do this 4years with Tinubu abeg

If he's in collude with the thieving Emefiele, a better technocrat had better been brought in.
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by Reference(m): 5:06pm On Jul 03, 2023
Elliotwaveforec:
Thieves! They want us to continue using our revenue to service debts.

I trust my president, interest rates are going to crash significantly; we may even embark on a negative interest rate regime like it was done in the Eurozone.

Hike in rates in Nigeria can never curb inflation! Emeffy did it, prices never came down.

A country like Nigeria needs to prioritise growth over price stability.

Can you imagine what a human being is saying....
I give up, honestly.
Just brace for impact.
I just hope all your personal relationships are very solid, I mean bone dry, oven baked.
Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by stallionng: 5:06pm On Jul 03, 2023
Don't we have sound economists/technocrats in Nigeria to give viable economic policies?, taking into considerations the peculiar nature and diversity of this nation cum our traits and behaviors without relying on western worlds whose advises must be tinctured with their interest to favour their investments

1 Like

Re: Bank Of America Urges Nigeria To Hike Interest Rate To 25.5% To Curb Inflation by joba4luv: 5:07pm On Jul 03, 2023
nlfpmod:


https://businesspost.ng/economy/inflation-bank-of-america-urges-nigeria-to-hike-interest-rate-to-25/?amp=1

I now realized that the West are the number one enemies of African masses after their advice to remove subsidy on fuel and electricity now is time to increase bank interest rate. Anyway is not their fault but that of our blind leaders leading us without focus upon all the resources in Nigeria still we are still suffering curse or hand work of blind leaders?

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