CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels - Business (3)

Welcome, Guest: Register On Nairaland / LOGIN! / Trending / Recent / New
Stats: 3,166,030 members, 7,863,693 topics. Date: Tuesday, 18 June 2024 at 12:04 AM

CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels - Business (3) - Nairaland

Nairaland Forum / Nairaland / General / Business / CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels (15476 Views)

CBN Raises Interest Rate To 18.75% / CBN Raises Interest Rate To 15.5% To Curb Rising Inflation / CBN Raises Interest Rate To 14% (2) (3) (4)

(1) (2) (3) (4) (5) (Reply) (Go Down)

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by IAmHim1: 3:34pm On May 21

Hmmmm

CBN

Let's analyse this move CBN made for a minute

1) people will find it difficult to borrow money from banks thereby making it difficult for new money to enter into the economy

2) This was a move by CBN to curtail inflation. commendable but the money has to match the goods else this action was a waste. Insurgency is the elephant in the pool

https://www.nairaland.com/8081414/nigerias-inflation-state-federal-governments

3) New money is already in the system by means of loans as I explained comprehensively here
https://www.nairaland.com/8080394/nigerias-inflation-what-uba-gtbopay

And guess what...new money is continually going to be in the system as long as loans are being given out and fractional banking exists

WHAT TO DO ABOUT THIS: make it easy for people to repay their old loans by reducing OR CANCELING the interest on LOANS YET TO BE REPAYED.

This alone cancels out EXCESS money from the economy. learn about how that works here

https://www.nairaland.com/8069458/wealth-series-pt-2-nigeria

Issuing Loans was supposed to be a secret way known only to financial institutions to take money away from the system...by way of interest on these loans...but it's a debt based economy and debt is needed to stimulate the economy

So what to do

Fractional reserve banking is still gonna multiply the money regardless BECAUSE PEOPLE ARE STILL GONNA TAKE LOANS.

the rich people that can afford the Loans!!!

This only increases the wealth gap making the rich get richer and the poor getting poorer since the poor won't be able to afford to take such loans because of the interest in it

a) Increase the reserve requirement to 50% upwards...

b) make it easy to repay old loans. SUBSIDY SHOULD BE PAID TO THE BANKS ON OLD LOANS YET TO BE REPAID SO that the borrowers only have to pay the principal on loans BECAUSE IF THEY DEFAULT ON THEIR LOANS, new money has entered the economy...and if such money isn't backed by the production of local goods, more inflation kicks in

AS I SAID EARLIER, insurgency is the elephant in the pool

c) all of these points are useless if there is no production of local goods

Farmer should be able to return back to their farms. Then Agricultural produce would then match the money in circulation...and if the agricultural products are excess, we export and gain forex!

As I said , insurgency has been the elephant in the pool
https://www.nairaland.com/8081414/nigerias-inflation-state-federal-governments

1 Like 1 Share

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by LaIabobo: 3:35pm On May 21

Paraman:
The steps taking by the CBN so far has made inflation rate slow down. By may, June or July, inflation should start falling

Inflation is around 33% while costs of goods have risen over 250%

Nigeria economy defeats even the best economic policy/principles.

The problem cant be solved using inflation rate or reducing the amount of money in circulation.

The fundamental issues to be addressed are insecurity, energy costs and stable exchange rate.

5 Likes

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by JuanDeDios: 3:36pm On May 21

giftbawa:
This means if you are to get a short-term loan for your business from any commercial bank they would charge an average of 36% percent per Annum. this would kill your business because if you add labour costs, Nepa / generator, marketing, logistics, commission to get the job, and other local and government taxes, it would be hard to stay in business.

Yes, it'll certainly be very bad for businesses that are servicing existing loans.

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by JuanDeDios: 3:38pm On May 21

bemeruca:
Nigeria is dead

It's not. But it's only a matter of time before it is if we don't get our act together.

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by Jocdon(m): 3:39pm On May 21

Khyrvxjzy:
igbos are coming against this news

This is not about Igbos but about of your survival. hungry fool.

2 Likes

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by JuanDeDios: 3:42pm On May 21

dododawa1:
Will food stuff

Reduced

?

No, not likely. None of the factors that should make food prices go down have been addressed. This announcement will only help bring in FPI, and even if that results in more dollar liquidity and some appreciation in the value of the naira, recent events tell us that will not lead to a significant reduction in food prices.

3 Likes

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by JuanDeDios: 3:43pm On May 21

higgs:
Increasing MPR will actually make inflation worse by increasing cost of borrowing for businesses. Right now,inflation in Nigeria is caused by insecurity and the high,unstable exchange rate of the naira

This take is correct, in my view.

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by JuanDeDios: 3:45pm On May 21

LaIabobo:

Inflation is around 33% while costs of goods have risen over 250%

Nigeria economy defeats the best economic policy/principles.
The problem cant be solved using inflation rate or reducing the amount of money in circulation.

Correct. Fundamental issues have to be addressed. No short cuts.

2 Likes

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by bemeruca: 3:45pm On May 21

JuanDeDios:

It's not. But it's only a matter of time before it is if we don't get our act together.

Nobody will get their act together. Soldiers are stupid, tribes are stupid, police are stupid, politicians are laughing all the way to the bank because they know our biggest curse is the multitude of tribes we have in this country and the selfishness that clouds our mind.

You talk bad about the situation, yoruba man will attack you because it is their tribal man in charge of the country, igbo do the same thing. The problem is there, we leave it and fight ourselves, causing more problems

2 Likes

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by JuanDeDios: 3:48pm On May 21

bemeruca:

Nobody will get their act together. Soldiers are stupid, tribes are stupid, police are stupid, politicians are laughing all the way to the bank because they know our biggest curse is the multitude of tribes we have in this country and the selfishness that clouds our mind.

You talk bad about the situation, yoruba man will attack you because it is their tribal man in charge of the country, igbo do the same thing. The problem is there, we leave it and fight ourselves, causing more problems

Well, it's sad. But some societies have overcome similar problems. All it take is elite consensus. That's what we don't have at the moment.

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by ogolemati: 3:50pm On May 21

post=130068824:

GOD BLESS NIGERIA 🇳🇬
We will get there pretty soon ......

Meanwhile,
Dearest Sane Nairaland members,
Sisi Yewande and Madam Ngo on behalf of All of us at MANNABBQGRlLLS are checking on you.

Times are hard
It is for the best future for us all.
No pain No Gain.
Guide your mental health.
Cut down on excesses and frivolity.
Keep joining us to pray for a better Nigeria 🇳🇬.
Slow and Steady we will get to the nation flowing with milk and honey.
A country of our dreams.
God bless you all.
God bless Nigeria 🇳🇬 🇳🇬 🇳🇬

We Love You all ❤️ 😍 💖

Addendum : Enemies of Nigeria, (No matter the part of the country you came from)
Skip this comment, it ain't for you.
Check the first line to see who it was addressed to.
If you do otherwise and quote to be negative or curse sane people here you will be miserable for life.
#No be curse,
Na FACT.
Thanks and Cheers.

naso from the days of darling daddy till now nigerians are still patients for the 2 monumental failures you enemies of the country unleashed on them grin

.how far buhari .how much do you sell your suya during pdp era and now that this failures you support are incharge

2 Likes

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by karkinase(m): 3:50pm On May 21

Patchy patchy policies.. how do you keep increasing interest rate when unemployment is at an all time high.. food security zero, power zero, insecurity high. raising interest rate simply means cost of production will increase and this will drive up price of goods and services.. creating more harsh economic conditions. How did we even get here as a country 😔

2 Likes

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by Brushstrokes20: 3:51pm On May 21

eBOLA on rampage! 💯💯💯🔊🔊🔊

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by bemeruca: 3:52pm On May 21

JuanDeDios:

Well, it's sad. But some societies have overcome similar problems. All it take is elite consensus. That's what we don't have at the moment.

What society with all this tribes that succeed in doing that?

The UK, US and Canadian is becoming problematic as they get more culture. The tribalism in Nigeria is too much, couple that with greed and selfishness.

If Biafra is created today, you will have another issue and new movement to create not briafa as a different country from South Biafra.

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by Treadway: 3:56pm On May 21

Lol.

This is getting interestico.

When cost of capital now stands at 27%, meaning lenders will charge between 32-35%, SMEs which are the productive sector don begin dey die be that na. When cost of capital alone has taken 35%, and other costs never even enter...meaning they either go public to raise equity, raise prices and pass the costs over to their goods/services, or just leave the game. Based on history, we can safely narrow it down to the last two options.

Nigeria, the conundrum.🤣🤣🤣

2 Likes

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by Timmi: 4:00pm On May 21

Nwaokunkpara:
CBN increases the already existing hardship by 26.25 percent

NIGERIANS go hearam

obviously you lack understanding of simple economics.

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by WhizdomXX(m): 4:02pm On May 21

Paraman:
The steps taking by the CBN so far has made inflation rate slow down. By may, June or July, inflation should start falling

Hopefully, this is Mays penultimate week already.

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by bet9ja(m): 4:06pm On May 21

Why can't they increase it by 1000% so that people will be discourage from lending. I don't expect much from Tinubu government. You can't give what you don't have

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by Trimjos: 4:11pm On May 21

Paraman:
The steps taking by the CBN so far has made inflation rate slow down. By may, June or July, inflation should start falling

Phoolish phool

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by ttmax09(m): 4:11pm On May 21

Ebeano49:
FREE money for FPIs. They will flood in now that $ is nearly at 1500. Their inflows will lead to artificial appreciation of the naira to about 1200. Then they'll exit. Thus making a killing on currency differential + 26.25% ROI. Happy days!

YOU CAN'T RIG INTERNATIONAL FINANCE.

Give Nigerians power supply. Give them security to boost agriculture, trade and tourism. Cut down on wasteful government spending. Enforce rule of law no matter whose horse is gored. Allow free, fair and transparent elections..... then sit back and watch foreign investors flood in as the country prospers. It's really that simple.

You said it well, but you missed the most important thing, Corruption. Without the death penalty strictly enforced for corruption and bribes, Nigeria not going anywhere no matter how beautiful the polices are.

4 Likes

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by NovusHomo(m): 4:16pm On May 21

Nwaokunkpara:
CBN increases the already existing hardship by 26.25 percent

NIGERIANS go hearam

Lie; its by 1.5%.

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by fullclub: 4:17pm On May 21

tuzeriouz:
This is completely unacceptable and doesn't augur well with the failing fiscal and financial position of the economy boldly marked with increasing inflation.

As a macro economic student.... It will help slow down the inflation as money will be sucked from the system.

It's a contractionary monetary policy that makes less money available for borrowers and people will rather safe there funds than spend it as it guarantees more interest.

But the downside is it slows down investments

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by Tonytonex(m): 4:19pm On May 21

Akwamkpuruamu:
Isn't this discouraging investment and bank borrowing?

that is what they want na.

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by yemmywesey(m): 4:21pm On May 21

Paraman:
The steps taking by the CBN so far has made inflation rate slow down. By may, June or July, inflation should start falling

It's a good step, but Nigeria should stop the importation of refined petroleum products by July too, its percentage of forex it needs can be up to 65% , that is the major forex drainer.

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by Blessedarethepe(m): 4:21pm On May 21

Paraman:
The steps taking by the CBN so far has made inflation rate slow down. By may, June or July, inflation should start falling

when did the inflation of the country ever come down

Did we ever have a deflationary trend in this country

It will keep increasing, no doubt about it...

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by PHIPEX(m): 4:22pm On May 21

The CBN is effectively slowing down economic activities.

Banks will raise their interest rates and scare businesses away. This will create further scarcity of goods and high cost of available ones since businesses and industries can't expand their productions.

Nigeria wooes Continues

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by Ebeano49(m): 4:25pm On May 21

Imagine if the people causing this excruciating pain on Nigerians were people from the dot nation?
Thank God we no follow for those way scatter Nigeria sha grin

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by Tonytonex(m): 4:26pm On May 21

fullclub:

As a macro economic student.... It will help slow down the inflation as money will be sucked from the system.

It's a contractionary monetary policy that makes less money available for borrowers and people will rather safe there funds than spend it as it guarantees more interest.

But the downside is it slows down investments

you mean that people will make profit for saving money in the bank?

Re: CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels by annyz: 4:38pm On May 21

This instability is why Total left Nigeria to Invest hugely in Angola recently.

3 Likes

(1) (2) (3) (4) (5) (Reply)

Aliko Dangote And Femi Otedola Richest Nigerian Billionaires: Forbes / Phamacy Or Chemist Shop Business / Aliko Dangote Bags Honorary Doctorate In ABU Zaria, Femi Otedola Spotted

(Go Up)

Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health
religion celebs tv-movies music-radio literature webmasters programming techmarket

Links: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Nairaland - Copyright © 2005 - 2024 Oluwaseun Osewa. All rights reserved. See How To Advertise. 53
Disclaimer: Every Nairaland member is solely responsible for anything that he/she posts or uploads on Nairaland.