Blackscorpion1j:
Economist in the house...What is the implications of this CBN decision on the common MAN in NIGERIA....Please no insult...I just want to learn...

If you have fixed deposit, treasury bills, bonds or even cash in your saving account, you will earn more interest.

If you want to borrow money from bank, you will pay more interest.

Determine the side of the divide you want to be by yourself.

HORLADY:
Before making any comment, it will be nice to know the relationship between Interest Rate, Inflation Rate, Exchange Rate

Go school then come teach the rest of us please.
Thank you.

OkayDaddy:
Designed to mop up excess naira in circulation.
The idea behind raising interest rates is to slow economic activity, but not by too much. When rates increase, meaning it becomes more expensive to borrow money, consumers react by refraining from making large purchases and reducing spending. The idea is that in today’s high inflationary environment, this decrease in consumer demand can help bring skyrocketing prices back down to “normal.”

On the other hand however, with increases in unemployment and continuous high inflation, there is the risk of sending the economy into a recession; it’s a delicate dance.

Producers react too, and borrow less and invest less and thereby create fewer jobs which will send the economy into a recession or and an uprising where the dance wouldn't be delicate at all.

NeckingNgulping:


Nah, money borrowed from the bank accumulates an exorbitant 18.75 interest rate.. So, if you borrow 100k for example, you're going to pay 18,750 as interest.

E no reach wetin loan sharks dey charged na! 35%

Copying and operating a system of government and policies that are alien to our clime because we lack the foundation upon which such systems are built and operated successfully.

Una go do trial and error tire.

We dey look.

Useless senseless morons.

Una must lead and govern by force.

lomprico:


E no reach wetin loan sharks dey charged na! 35%

Dem dey even charge reach 50%. Just imagine.

But loan sharks dey try sha o, carri money give person wey you no sure sey e go fit pay.

It can lower the exchange rate though cos with less naira in circulation, the demand for forex will reduce especially among traders who borrow to import goods but of course it will affect the price of goods and services on the market 😏

NairaGPT:
The effect of this policy:

1. Borrowing becomes costlier: Poor individuals who rely on loans or credit for various needs may face higher interest rates on their loans. This can lead to increased repayment burdens and make it more difficult for them to access credit for essential expenses or investments.

2. Reduced spending power: As borrowing costs rise, overall consumer spending may decrease. This can lead to higher prices for goods and services, affecting the purchasing power of the poor and potentially making it harder for them to afford basic necessities.

3. Impact on employment: If businesses face higher borrowing costs due to increased interest rates, they may be less likely to expand or invest in new projects. This can result in slower job growth or even job losses, affecting the employment prospects of the poor.

Consider this:

The CBN prime rate has no direct impact on the poor. If it has, it's very implicit and negligible. It's impact will be more pronounced on large manufacturing and production operations of conglomerates and multinationals, increasing their short term liabilities (banks would rather borrow these elements than to the poor). Institutional money managers and large finance houses such as pension funds, banks and insurance companies will react to the hike too. Specifically, the prime rate hike is likely to initiate a strong short term sell off in the NSE all share index that may cool off the current bullish trend in the equities market, considering that big investors and money managers will see economic sense in rebalancing their portfolios in favor or fixed income assets.The poor already pay a premium for TRYING to access loan funds from financial institutions and so a hike in the CBN prime rate might not change their ability to borrow in the short term.

By the way, diminished consumer spending isn't supposed to cause inflationary pressure in the economy as you pointed out. Retailers will only suffer some more if they put up their prices during times of reduced spending.

On the flip side, the hike is very likely to mop up excess liquidity in the economy that will be moped up by the fiscal sector and channeled to government programs and social intervention schemes, resulting in the empowerment and employment of the poor. The government, on all levels support the poor through welfare programs that many aren't aware of. Employment of the poor is usually generated through recurrent government projects and special public works. This might be an overall win for the little guys.

Blackscorpion1j:
Economist in the house...What is the implications of this CBN decision on the common MAN in NIGERIA....Please no insult...I just want to learn...

The CBN prime rate has no direct impact on the poor. If it has, it's very implicit and negligible. It's impact will be more pronounced on large manufacturing and production operations of conglomerates and multinationals, increasing their short term liabilities (banks would rather borrow these elements than to the poor). Institutional money managers and large finance houses such as pension funds, banks and insurance companies will react to the hike too. Specifically, the prime rate hike is likely to initiate a strong short term sell off in the NSE all share index that may cool off the current bullish trend in the equities market, considering that big investors and money managers will see economic sense in rebalancing their portfolios in favor or fixed income assets.The poor already pay a premium for TRYING to access loan funds from financial institutions and so a hike in the CBN prime rate might not change their ability to borrow in the short term.

The hike is very likely to mop up excess liquidity in the economy that will be moped up by the fiscal sector and channeled to government programs and social intervention schemes, resulting in the empowerment and employment of the poor. The government, on all levels support the poor through welfare programs that many aren't aware of. Employment of the poor is usually generated through recurrent government projects and special public works. This might be an overall win for the little guys.

Does this increase the interest for fix deposit

eneyoduke:
Does this increase the interest for fix deposit

It should. It may depend on the volume of funds you want to park into the FD. You might get better rates with incremental commitments.

tishbite42:
Make Tinubu kukuma kee everybody

lol

Votukpa:


Consider this:

The CBN prime rate has no direct impact on the poor. If it has, it's very implicit and negligible. It's impact will be more pronounced on large manufacturing and production operations of conglomerates and multinationals, increasing their short term liabilities (banks would rather borrow these elements than to the poor). Institutional money managers and large finance houses such as pension funds, banks and insurance companies will react to the hike too. Specifically, the prime rate hike is likely to initiate a strong short term sell off in the NSE all share index that may cool off the current bullish trend in the equities market, considering that big investors and money managers will see economic sense in rebalancing their portfolios in favor or fixed income assets.The poor already pay a premium for TRYING to access loan funds from financial institutions and so a hike in the CBN prime rate might not change their ability to borrow in the short term.

By the way, diminished consumer spending isn't supposed to cause inflationary pressure in the economy as you pointed out. Retailers will only suffer some more if they put up their prices during times of reduced spending.

On the flip side, the hike is very likely to mop up excess liquidity in the economy that will be moped up by the fiscal sector and channeled to government programs and social intervention schemes, resulting in the empowerment and employment of the poor. The government, on all levels support the poor through welfare programs that many aren't aware of. Employment of the poor is usually generated through recurrent government projects and special public works. This might be an overall win for the little guys.

It would be beneficial if they were intervention programs but can you point out just one? No. For people living in extreme poverty, even small changes in economic conditions can have a significant impact on their daily lives and well-being. It’s crucial for policymakers to be mindful of the potential consequences and implement measures to address the needs of the most economically disadvantaged during such rate hikes.

Raising interest rate is akin to slowing economic growth. So even with all the recent hardship faced by businesses in Nigeria, you now increasing interest rate instead of reducing it? Smh

When you they abroad you go they watch Nigeria news for Roku Tv and wonder how you were once in the mess called Nigeria!

NairaGPT:
It would be beneficial if they were intervention programs but can you point out just one? No. For people living in extreme poverty, even small changes in economic conditions can have a significant impact on their daily lives and well-being. It’s crucial for policymakers to be mindful of the potential consequences and implement measures to address the needs of the most economically disadvantaged during such rate hikes.

As I said you and many others aren't aware of these schemes and programs. There are many of them on the state and local level. I'm not crusading for the government or anything, just stating facts. The point is, the hike won't affect the poor any more than they are affected with comparatively lower interest rates. It affects the big guys mostly.

nlfpmod:


https://dailypost.ng/2023/07/25/cbn-mpc-raises-interest-rate-to-18-75/

They should all be informed that N-Power
This is 7 months now they never pay people all the stipends to the beneficiary

No be policy we want chop

GRACEGLORY:
What!


How do you intend to cool the economy. Now it becomes more expensive to borrow money, consumers will definitely refrain from making purchases and spending reduces. Yet fuel price is alarming.

This rate hike won't bring down pump price, will it?

The CBN will need to hike interest rates above inflation before it starts encouraging savings. This small incremental will yield little to no result

I suspect Tinubu, who wants low interest rates may be influencing the governor.

This actions is correct.
The rate is not sufficient.
It should increase a little more.
But why is government not increasing treasury bill rates

In the 1970s, Ghanaians flooded West African countries, including Nigeria before they were expelled from Nigeria in the mid 1980s. It's now Nigerians' turn to replicate that migration pattern. Unlike the Ghanaians who were focused and hardworking and rarely brought their nation to disrepute, disreputable Nigerians who Japa would soon disgrace themselves and hence Nigeria through their shady deals.

All the Nigerians including batists and Agbadorians who are doubting Thomases will gradually realise that Tinubu is a WICKED demonic psycho ! Let the poor brreeefffth .All of Una go see nwiii with your korokoro eyes

Votukpa:


As I said you and many others aren't aware of these schemes and programs. There are many of them on the state and local level. I'm not crusading for the government or anything, just stating facts. The point is, the hike won't affect the poor any more than they are affected with comparatively lower interest rates. It affects the big guys mostly.

name 10 intervention programs that you know someone who has benefited from. Scrap that name 1

iamdapsyj:


Too much liquidity in the economy..... so the CBN did this to manage inflation in the country. When the economy stabilizes, they can now begin to reduce the interest rate gradually.

Since October 2022, cbn has been mopping up of the populations money. The wan make the masses more poor, they will fail

You are being cleaver by half or urtherly stupid.


The rope gets more tight and no structure or foundation for social interventions and hardly can be.

But here u are claiming inexistent creations.

This moves is to control and reduce the populations! Stop playing devil

Votukpa:


The CBN prime rate has no direct impact on the poor. If it has, it's very implicit and negligible. It's impact will be more pronounced on large manufacturing and production operations of conglomerates and multinationals, increasing their short term liabilities (banks would rather borrow these elements than to the poor). Institutional money managers and large finance houses such as pension funds, banks and insurance companies will react to the hike too. Specifically, the prime rate hike is likely to initiate a strong short term sell off in the NSE all share index that may cool off the current bullish trend in the equities market, considering that big investors and money managers will see economic sense in rebalancing their portfolios in favor or fixed income assets.The poor already pay a premium for TRYING to access loan funds from financial institutions and so a hike in the CBN prime rate might not change their ability to borrow in the short term.

The hike is very likely to mop up excess liquidity in the economy that will be moped up by the fiscal sector and channeled to government programs and social intervention schemes, resulting in the empowerment and employment of the poor. The government, on all levels support the poor through welfare programs that many aren't aware of. Employment of the poor is usually generated through recurrent government projects and special public works. This might be an overall win for the little guys.

they remove subsidy
they plan to increase electricity tariff without alternatives
now they increase interest rate to reduce borrowings
WHO IS IN CHARGE OF naija economy sef?

NairaGPT:
name 10 intervention programs that you know someone who has benefited from. Scrap that name 1

I work as director in a Federal parastatal with offices Nationwide. All what this parastatal does is pro-poor programs and they've been doing it for almost 40 years. These programs are done regularly and don't have any special names and don't appear on network news. They are more state and local govt related.

Votukpa:


I work as director in a Federal parastatal with offices Nationwide. All what this parastatal does is pro-poor programs and they've been doing it for almost 40 years. These programs are done regularly and don't have any special names and don't appear on network news. They are more state and local govt related.

name 3

Votukpa:


It should. It may depend on the volume of funds you want to park into the FD. You might get better rates with incremental commitments.

Thanks bros 🙏