All is just grammar. I doubt if anything will come out of it.

Goodlady:
What's the benefit?

Read the post by Delarue.
2 posts above yours.

He gave a very detailed explanation.

Theoretically, higher interest rates typically lead to lower inflation rates. This is what lecturers teach. However, this relationship is not straightforward, especially in a developing country like Nigeria.

This is not the first time the CBN is hiking interest rates. Since May 2022, the CBN has continued to increase interest rate and not even once, has the inflation rate responded correctly. Facts don't lie.

The idea of adopting all sorts of economic jargons from the West has done more damage here. We need to find what works for us. Abroad, the entire economy operates on credit. People buy the most basic things like phone with bank credit.

Over here, how many Nigerians rely on bank loan? How many? They have mortgage, here we have ajo or buying Naira with Naira (POS) and all sorts of ideas that are unconventional to classical economists.

We need to find what works for us. At best, hiking interest rates might make a few conservative investors romance a few Naira investments like FG bonds or TBills for a while...but no aggressive investor will come close to the Naira just yet.

DeLaRue:
It is a double edge sword.

As CBN rate rises, commercial banks will increase savings/fixed deposit rates, thereby attracting more savers who will be locked into 12 months or more term.

This will indirectly reduce the money available for spending and thus reduce patronage of many goods. As traders and manufacturers wait to exploit consumers with predatory prices, less and less people will buy their goods. As their warehouses pile up with unsold goods, they'll have to reduce prices, thus helping to reduce inflation.

Increasing interest rate will also mean the government can issue bonds at rates that will be attractive to foreign investors. More dollars should flow into the country.

The bad news is:

As Cbn increases interest rate, banks too will increase their lending rate with the likely result that:

1. Many businesses that depend on bank loans will lay off staff or even close down

2. There will be fewer new investments- businesses can't survive on 33% - 35% loan rate

3. More pain for the economy generally.

Unfortunately, with the amount of money printed by Mr Buhari's government, the CBN will have to keep increasing interest rate in order to mop up excess liquidity and control inflation.

Managing a large economy in times of crises is a sophisticated game of chess. For every positive steps, there are multiple potential negative consequences. There are usually no easy solutions.

Unfortunately for politicians, the public want solutions NOW! or they dabaru everything and even call for coup

The public is not interested in, nor do they understand economic theories.

Excellent, unbiased analysis 👍

Omooba77:


https://dailytrust.com/just-in-mpc-raises-interest-rate-to-22-5/

Increasing the MPR mean that banks will charge higher interest on borrowing, this will discourage investors from approaching the banks for loan. I hate to criticize this people but I just hope this policy don't destroy what is left of the economy.

Bevista:
Fairly bold move by CBN.
---
The interest rate was too low compared to inflation resulting in a negative yield on bonds. Government cannot be borrowing at such a low rate while causing huge inflation on the masses. It encourages financial rascality.
---
The negative yield was partly why many investors preferred to preserve their funds in USD resulting in the significant depreciation of the naira.
---
Let's hope the fiscal side (Wale Edun & Co) begin to act responsibly.

There is nothing to applaud about this policy, I honestly hate to criticize this people, but, the this particular policy has so many negative effects and when making an economic policy, care must be taken about it negative effects.

The banks will increase it rates for borrowing, and many investors cannot approach banks for loans. I know CBN is trying to reduce money in circulation, but when this affects production, we are adding more bigger problems to the economy.

DeLaRue:
It is a double edge sword.

As CBN rate rises, commercial banks will increase savings/fixed deposit rates, thereby attracting more savers who will be locked into 12 months or more term.

This will indirectly reduce the money available for spending and thus reduce patronage of many goods. As traders and manufacturers wait to exploit consumers with predatory prices, less and less people will buy their goods. As their warehouses pile up with unsold goods, they'll have to reduce prices, thus helping to reduce inflation.

Increasing interest rate will also mean the government can issue bonds at rates that will be attractive to foreign investors. More dollars should flow into the country.

The bad news is:

As Cbn increases interest rate, banks too will increase their lending rate with the likely result that:

1. Many businesses that depend on bank loans will lay off staff or even close down

2. There will be fewer new investments- businesses can't survive on 33% - 35% loan rate

3. More pain for the economy generally.

Unfortunately, with the amount of money printed by Mr Buhari's government, the CBN will have to keep increasing interest rate in order to mop up excess liquidity and control inflation.

Managing a large economy in times of crises is a sophisticated game of chess. For every positive steps, there are multiple potential negative consequences. There are usually no easy solutions.

Unfortunately for politicians, the public want solutions NOW! or they dabaru everything and even call for coup

The public is not interested in, nor do they understand economic theories.

Economic theory are guess work. Can you explain the subsidy removal and naira floating that turned out to be disaster

Crvrider:


The Central Bank of Nigeria raising the Monetary Policy Rate (MPR) to 22.75% means that borrowing costs have increased. This move is often made to control inflation by making it more expensive for banks to borrow money from the central bank, thereby reducing the amount of money in circulation and curbing inflationary pressures.

But their is no money in seculation as of now. Nigeria is not a credit society, we buy things outright. Its just a little percent have mortgage or credit card in Nigeria so I don't see how this increase will help the economy. Our economy is 80% informal.

Seun:
Reduction in inflation.

This will do nothing in reducing inflation, infact it will even add more pain to manufacturers as commercial banks too will increase interests rate on loans.

The real causes of inflation has been clearly highlighted in the last paragraph of the main article.

Rising cost of energy, high fiscal deficits and inflation.

Victory662:
Somebody should explain this to me oo. I'm a lay man on this particular issue. How will this help our depreciating naira?

The policy is not for naira appreciation but to fight inflation. The MPR is the rate at which CBN borrows money to commercial banks, and it will affect the way and rate banks will lend money to investors, now, technically it mean that interest on loan for businesses will be high and will discourage investors from borrowing, off course we all know what will happen, production will reduce and inflation continue.

CodeTemplar:
Finally, they have given in to our textbook jargon experts. Let's see how the move goes.

Cc: grandstar, nairalanda1, omohayék, kukutente

My brother i am crying here, a country where unemployment is high how can you increase MPR , this man is useless... we are talking of single digit this idiot is increasing it

DevilsEqual:
Waiting for obidients who would come here to call a verifiable stats some propaganda

Some emergency Economic analysts will come here to start propounding some theories on why this will is just smokescreen but na lie, Nigeria go rise for their presence


kudos Cardoso, Now its looking like we now know what to do to make things right

Last quarter of 2024 seems promising

The past ones they made, we criticized it and were later vindicated. I am not a yes man, I criticize a bad policy.

Saintinoo:


Increasing the MPR mean that banks will charge higher interest on borrowing, this will discourage investors from approaching the banks for loan. I hate to criticize this people but I just hope this policy don't destroy what is left of the economy.

When the bank charge higher interest, it discourages would be borrowers especially in this our present economy that no body know where its heading to.

Seun:
This is fantastic and I support them for doing it.

fantastically flawed move. I see your handiwork o. Mr twin brother to BOT.

Bevista:
I agree.

Interest rate cannot be lower than inflation. Imagine pension funds investing at 18% yield while inflation is over 30%. It erodes the real value of the savings of pensioners.

It has nothing to do with the rate of inflation, there are inflation which are over 60 percent. This is just a monetary tool to check inflation, but while doing this, you are destroying other side of the economy.

teadrake:
Bold yet necessary move to restore balance in the economy. Era of Reforms.

You don't even know what this policy mean or how it will help the economy, even if it will, but you are already supporting it.

This is clearly an IMF implementation strategy
Punish the people and squeeze them dry
I pity Tinubu, his name is already added to one of the worst presidents after just 8months

jmoore:

You guys are funny.

Cost push inflation can't be tackled by interest rate.

Majority of small businesses have nothing to do with borrowing.

This is not the first time CBN is raising interest rate. What did they achieve the last time?

my bother God bless you... politicians stores money in the houses, how can this be tackle increase MPR

Saintinoo:


Increasing the MPR mean that banks will charge higher interest on borrowing, this will discourage investors from approaching the banks for loan. I hate to criticize this people but I just hope this policy don't destroy what is left of the economy.

There are over 300,000 cooperative societies in Nigeria (around the largest in the world). The UK has only 7,000.

These institutions have more than 30 million members in Nigeria.

SMEs contribute 48% to Nigeria's GDP.

Over 70% of business owners in Nigeria would rather depend on loans from cooperative societies than bank loan. These are the people controlling credits in Nigeria.

The above are fundamental datasets that are peculiar to the Nigerian economy. We need people to hack our peculiarities. Enough of using economic jargons from the West. Our lives and economic decisions shouldn't be solely based around the banking sector.

a4cube:
When the bank charge higher interest, it discourages would be borrowers especially in this our present economy that no body know where its heading to.

In the long run, this policy will further destroy the economy, as it is an anti investment policy. Imagine that we need to produce more goods but investors can only borrow to do that, they will certainly be discouraged by the high interest rate.

Acidosis:


There are over 300,000 cooperative societies in Nigeria (around the largest in the world). The UK has only 7,000.

These institutions have more than 30 million members in Nigeria.

SMEs contribute 48% to Nigeria's GDP.

Over 70% of business owners in Nigeria would rather depend on loans from cooperative societies than bank loan. These are the people controlling credits in Nigeria.

The above are fundamental datasets that are peculiar to the Nigerian economy. We need people to hack our peculiarities. Enough of using economic jargons from the West. Our lives and economic decisions shouldn't be solely based around the banking sector.

How many cooperatives does Dangote and BUA belong to, or why didn't Dangote approach one co operative to collect loan for his refinery.

When economic decisions are made, we criticize without being bias. How many Nigerians are in the so called co operative, and how much loan can they give out?

You think we are talking about loan to start a zobo production unit or sell akara here?

Newton1045:
Kpom

All deposits in dollar be converted to naira equivalence.
If u need dollar, get from the banks.

If u save dollar,it shud be converted to naira equivalence.

Cancel dom account straight

Be deceiving yourself politicians and the people stealing money are not saving it in the bank

grandstar:


I pray it hits 30%.This will slow inflation down and make the Naira appreciate.

Pls explain to me, how will it slow down inflation, I don't know that is why i ask pls

Naira Exchange Rate: CBN Starts Dollar Sales at N1,301 per USD https://www.bhginfodesks.com/2024/02/naira-exchange-rate-cbn-starts-dollar.html

IamANigerianMan:


Be deceiving yourself politicians and the people stealing money are not saving it in the bank

Gbogbowa:
there is easy solution if they really know what they are doing but they don't want to do it. Emefiele knew he printed money and he needs to mop up the naira before Dec last year to control the effects of the printing but this same people fight that because they want to win election by sharing money unfortunately this is the consequence of that decision

Emefiele' s Naira redesign was not meant to mop up money from the economy. Get your facts right.

DevilsEqual:
Waiting for obidients who would come here to call a verifiable stats some propaganda

Some emergency Economic analysts will come here to start propounding some theories on why this will is just smokescreen but na lie, Nigeria go rise for their presence


kudos Cardoso, Now its looking like we now know what to do to make things right

Last quarter of 2024 seems promising

Abeg Educate me on this policy

DeLaRue:
It is a double edge sword.

As CBN rate rises, commercial banks will increase savings/fixed deposit rates, thereby attracting more savers who will be locked into 12 months or more term.

This will indirectly reduce the money available for spending and thus reduce patronage of many goods. As traders and manufacturers wait to exploit consumers with predatory prices, less and less people will buy their goods. As their warehouses pile up with unsold goods, they'll have to reduce prices, thus helping to reduce inflation.

Increasing interest rate will also mean the government can issue bonds at rates that will be attractive to foreign investors. More dollars should flow into the country.

The bad news is:

As Cbn increases interest rate, banks too will increase their lending rate with the likely result that:

1. Many businesses that depend on bank loans will lay off staff or even close down

2. There will be fewer new investments- businesses can't survive on 33% - 35% loan rate

3. More pain for the economy generally.

Unfortunately, with the amount of money printed by Mr Buhari's government, the CBN will have to keep increasing interest rate in order to mop up excess liquidity and control inflation.

Managing a large economy in times of crises is a sophisticated game of chess. For every positive steps, there are multiple potential negative consequences. There are usually no easy solutions.

Unfortunately for politicians, the public want solutions NOW! or they dabaru everything and even call for coup

The public is not interested in, nor do they understand economic theories.

You are right, but in your own understand did you think this present CBN is good?

nairalanda1:


Because we had appreciable income from oil. Not anymore.

Modified

And when the oil price crashes, borrowing commences.

1973-82, 2006-14.

No, It’’s because GEJ was not so irresponsible to print 23trillion naira unearned money. The price of oil has been rising for close to 3 years now almost the same price as the GEJ era. The 120 dollars price of oil much shouted about was short-lived

Saintinoo:


How many cooperatives does Dangote and BUA belong to, or why didn't Dangote approach one co operative to collect loan for his refinery.

When economic decisions are made, we criticize without being bias. How many Nigerians are in the so called co operative, and how much loan can they give out?

You think we are talking about loan to start a zobo production unit or sell akara here?

That zobo production business and the likes (i.e.,MSMEs) contribute over 48% of your country's GDP, and over 90% of the total employment in Nigeria. The highest in the universe or let me say the planet earth. Meaning that, if these MSMEs shut down today, you and everyone in your state will most likely be jobless forever.

I understand that many of you don't like data, but I'll try to answer your questions again.

30 million Nigerians belong to at least one cooperative society.

Cooperative societies in Nigeria are over 300,000 as opposed to just 7k in the UK. Your parents most likely used loans gotten from one cooperative society to build their first home, get their first car. They probably got cooperative loan at some point to pay your school fees, but no, you want to build your economy around bank datasets because you're in the UK, where people build/buy homes via mortgage?

Cooperatives in Nigeria contribute 1.2 trillion yearly to your GDP.

But you want to work with something you read from a book written by a UK based professor? Probably someone that has never withdrawn money from a POS vendor? Ahaha 😄

When your leaders are ready, they'll consult the right people.

Make I rest.

DevilsEqual:
Waiting for obidients who would come here to call a verifiable stats some propaganda

Some emergency Economic analysts will come here to start propounding some theories on why this will is just smokescreen but na lie, Nigeria go rise for their presence


kudos Cardoso, Now its looking like we now know what to do to make things right

Last quarter of 2024 seems promising

sense you no get

Akinomoakin021:

No, It’’s because GEJ was not so irresponsible to print 23trillion naira unearned money. The price of oil has been rising for close to 3 years now almost the same price as the GEJ era. The 120 dollars price of oil much shouted about was short-lived

Yeah and you should also know that between 2014 and 2021,oyel was so low that we took loans and more loans.

So when oil shot up in 2021, the money we earned went to pay those loans.

And part of the loans we took then we're from CBN who printed money for the loans.


I am not attacking your hero gej.


I am pointing out why we have a vulnerable economy. And why you should never put your eocnomy on oyel.

We were.here before, in 1972-83 when oil prices were so high, one naira was really one dollar. Then in 1982 oil crashed. By 1993 one dollar was 20 naira. By 2001, it was
97 naira.


Nigeria should be an exporter of manufacturing goods and services, then we can have our currency better than gej and even better than 1978.