₦airaland Forum

caye:
I read through IamHim1's post.
I'm speechless. Honestly,...
We were all miseducated from primary school to university: the education of a grass cutter.

Economics & economic theory has some general principles, that can be applied across nations, but you got to be careful;...
when cultures, conditions, beliefs, races etc are different, then each must be subject to possible scenarios.

1. How many ppl are making & keeping large percentages of their money as savings , in this economy, compared to , say 2014? Therefore , if the answer is that savings or money in thw bank are reducing, increasing interest rates WON'T KEEP MONEY WITHIN AN ECONOMY experiencing galloping hyper- ultra inflation.
Truly, Cardoso is looking at the borrowing aspect for importation & exports. You don't want more ppl to borrow, and then sell goods across the border or overseas, so as to keep a substantial amount of money within the economic system, but...Olayemi, those exporting will not bring back dust na? Some forms of money will also return to the system.
If it is the importation/ export part, even if some farmers in Niger (!) , zamfara or Owode-yewa are being said to be transporting agric products from Nigeria ( how many sef?) to across the border , so they can get better foreign exchange ( CFA), the CFA comes back into the economy. The CBN is thinking that Nigeria food market may be getting deprived of agric products if cross border trade is encouraged , because ( you may not know) THE MOST DEVALUED CURRENCY RIGHT NOW IN WEST AFRICA IS THE NAIRA! Even if a smart business person borrows from bank to import ( say beans ) from Togo, they will still pay interest on the principal. At least you are stimulating trade.


But Cardoso, low farm output due to insecurity + high interest rate + high fuel price = chaos!

Cardoso , it seems, wants stagnant money within an economy. But stagnant money, with hunger, with inflation...is it high interest that will now reset the economy? The egbon seems to be seeing economy from the monetary aspect only, but is forgetting the Real Economy ( agriculture +industry)

These Lagos boys are just working by textbook theories!

I doubt if they are going physically to the markets, ports, borders , etc and seeing the REAL EFFECTS ON THE MAJORITY OF THE POPULATION.

They sit inside AC offices in Abuja, and watch foreign news, thinking that IMF/ world bank economic policies will deliver Nigeria.

Do you think that India that was told by the Europeans in the 1940s that it would take them 70-100 yrs to achieve agric breakthrough in output, ( India had a lot of famines from 1700-1930s; caused by the evil British stealing majority of their output ), but same India did it in 25-40 years!

It wasn't IMF / world bank economic strategies...it was Indian Native Economic knowledge!

Cardoso & his oga are lost men!

Baba, abeg, una wey sabi all dis big big economics jargons, abeg mek una help us dey advice dis useless govt dey go abeg!

Na kpai dem Jez swear to kpai d common man inside naija!

Baba keep dishing out advices abeg & I pray dey listen to ppl like u abeg!

Ebin pawa ooo!



ee nor gor ever better for hell-anus, yaribanza & their fellow zombies ooo!... Allah!

Ok…


Good Baseus and Remax Powerbanks at wholesale and retail rates.

Check sig for information, thanks !

This guy and his copy and paste policy from the FEDS. 26.75%?

if we give you the job, you can do better

Hemanwel:
This CBN guy doesn't know what he's doing, olohun! See where nepotism has landed us.

Bintasukai:
No, the opposite is the case. During inflation, you raise the interest rate to ensure more money is not getting dumped into the market through loans.

The system that works with White men economy will never work in Nigeria. Do you now have more money in Nigeria economy? If there's more money in the circulation as you said, people will not be crying for hunger. One of what Nigeria needed now is investment that will create more job opportunities but by increasing the interest rate would that be achieved?

What you said above can only work in a sane economy but not in a corrupt economy like Nigeria

004gist:
Inflation and interest rates have inverse relationship.

High inflation calls for high interest rate to stop money growth

High inflation calls for high interest rate that is in a sane economy, an incorrupt economy. The system that works with white men economy will never work in Nigeria because of corruption. Tell me did you have enough money in circulation today? If YES why are the people crying for hunger? That policy only applicable with a sane economy, one of what Nigeria needed now is to create more investments but by increasing the interest rate would that be achieved?

SmartyPants:
Stop talking nonsense. When there is inflation you don't increase expenditure! You do the opposite! Do you even understand how inflation works??

If you want to talk to me be mature enough to interact with me never use derogatory word or statement but if you found my comments inconvenience for you, just read and look away, let me interact with a sane and mature minds. So if you want me to response to what you said above, put it in a mature manner. Thank you!

Bantu10:
Tulumbu and his Yoruba quota system CBN gofnor will surely sink this country

wetin remain to sink again. People wey don sink the country tey tey

starpower:
Which school of thought

What are the schools of thought you know?

RightChanneI:
High inflation calls for high interest rate that is in a sane economy, an incorrupt economy. The system that works with white men economy will never work in Nigeria because of corruption. Tell me did you have enough money in circulation today? If YES why are the people crying for hunger? That policy only applicable with a sane economy, one of what Nigeria needed now is to create more investments but by increasing the interest rate would that be achieved?

Yss there is soo much naira in circulation. In fact Buhari was the one that printed so much money n pump into the system.

So u see the graph satisfy the quantity theory of money..
Pump money into the system when productivity does not increase it leads to inflation...

And Philip curve theory.. Study it.


In simple note.. The government need to increase interest rate temporary to prevent banks from creating more money

Artscollection:
The problem is that it's not induced by high demand of goods or excess liquidity, this is a peculiar issue that should be addressed locally not copying from america, the inflation that america is fighting is a fallout of the excess money they have been printing from convid time used for social programmes and their proxy war in ukraine while ours is as result of the subsidy removal and the naira collapse.

I dont truly understand u but you should know that Buhari printed so much money and I think tinubu is doing same violating CBN core principles.

They print money n distribute through FAAC.
in 2010 FAAC allocation hardly pass 400 billion but now it's chasing 2 trillion. Has oil revenue increased? Or productivity increases? Answer is no

Abaseke of edo state once questioned this logic

You can submit your CV for CBN Governor

RightChanneI:
This is totally wrong! when there is inflation, government ought to reduce the interest rate and increase the expenditure not increasing the interest rate again while claiming to be fighting inflation

Morons

politicoNG:
https://nairametrics.com/2024/07/23/cbn-raises-interest-rate-by-50-basis-points-to-26-75/?fbclid=IwZXh0bgNhZW0CMTEAAR18ATmi6XT-FwU2kpJdQ8EZ98LLOIo9TXz2cmJxStYT2yyFwGIOsNE4tcg_aem_nBziHEPLINOlCiIm-ftk0A#google_vignette

The same CBN governor that claimed only 5% Nigerians have up to N500k in their bank account is not saying we have excess liquidity?

RightChanneI:
This is totally wrong! when there is inflation, government ought to reduce the interest rate and increase the expenditure not increasing the interest rate again while claiming to be fighting inflation

Wrong! Economics 101.

IAmHim1:
Hmmm

This is just the First: to discourage borrowing and reduce the fractional reserve ratio of commercial banks so Opay and GTB doesn't multiply electronic money from customers deposits and loan it back to them again while still charging the same customers interest on loans and hefty collaterals

https://www.nairaland.com/8080394/nigerias-inflation-what-uba-gtbopay



But what happens to the excess money already in circulation, Cardoso?

Remember, the minimum wage has already been increased even though it wasn't adviced

https://www.nairaland.com/8107351/nigerias-govt-alternative-minimum-wage

The excess money in circulation has to be paired with good LOCALLY PRODUCED
IF NOT, THIS ACTION SOLVES NOTHING

https://www.nairaland.com/8101772/nigerias-inflation-introduction-subsidy-old

and yes, a bag of rice can become #15000 or #5000 if and IF the rice is excess and the money in circulation is few.


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

DANGOTE refinery can reduce the price of transportation of food from where it is produced to where's it is eaten and our naira won't be used to chase imported food

people are sabotaging your efforts Cardoso.

Heads up!

Very well said.

004gist:
Yss there is soo much naira in circulation. In fact Buhari was the one that printed so much money n pump into the system.

Is like you don't understand what it means when there's money in circulation.. When there is more money in circulation, savings will be high because people will be willing to save more, also there won't be hunger in the land.. Let me use PDP regime as an example, when Obasanjo was the president, people saved more because they have enough at hand. How many people are saving now during this APC?

004gist:
So u see the graph satisfy the quantity theory of money..
Pump money into the system when productivity does not increase it leads to inflation...

And Philip curve theory.. Study it.


In simple note.. The government need to increase interest rate temporary to prevent banks from creating more money

Many things can lead to inflation, you don't have to teach me Philips curve. I said it earlier that white men policies can't work in Nigeria as the cultures, systems, races, etc are differ. Is it when people are crying for food the right time to increase interest rate? How many job has this government created since they assumed office?

Did you know the rate of unemployment in Nigeria as at today compare to the past years? Instead for the government to encourage more investments that will reduce the rate of unemployment, they are increasing the rate of interest. Would that stabilize the economy that's facing high rate of unemployment, galloping hyper inflation?


Go and study the economy of developed nations, it is there you can apply Philip curves or whatever curves you might talk of. All these can't work in a corrupt economy system like ours

According to you

TruthisOut:
Wrong! Economics 101.

Hackerman4745:
This one no concern the common man.

Common man just need to feed that's all.

Nothing concern common man with loan

This is so wrong
If the companies borrow loans to produce at a high interest rate, then the cost of production have increased. To make profit, they will increase the prices of goods... So common man food cost have increased. Common man no fit belle full again

Barzinime:
You can submit your CV for CBN Governor

You can submit your CV to my company!

RightChanneI:
Is like you don't understand what it means when there's money in circulation.. When there is more money in circulation, savings will be high because people will be willing to save more, also there won't be hunger in the land.. Let me use PDP regime as an example, when Obasanjo was the president, people saved more because they have enough at hand. How many people are saving now during this APC?





Many things can lead to inflation, you don't have to teach me Philips curve. I said it earlier that white men policies can't work in Nigeria as the cultures, systems, races, etc are differ. Is it when people are crying for food the right time to increase interest rate? How many job has this government created since they assumed office?

Did you know the rate of unemployment in Nigeria as at today compare to the past years? Instead for the government to encourage more investments that will reduce the rate of unemployment, they are increasing the rate of interest. Would that stabilize the economy that's facing high rate of unemployment, galloping hyper inflation?


Go and study the economy of developed nations, it is there you can apply Philip curves or whatever curves you might talk of. All these can't work in a corrupt economy system like ours

I didn't read much what u wrote...
But the first line us wrong. No theory support that.

When there is increase in money supply which is encouraged by low interest rate savings willl be low.
What prompt people to save is high interest rate.

So when there is high interest rate it encourages people to save. But it discourages investment.

To get it clear study the theory of saving and investment.
Like I said Buhari increase the money supply interest rate has been 11% up to 2020/2021. Buhari printed so much money.

The graph below is the money growth.

Although u won't know there is too much money in circulation because it's worthless... Today u easily see people holding 20k, 50k, taking it to makrjet just to buy foodstuff they will eat in 5 days but 10 years ago it's not like that

Summery.... Too much money in circulation via printing much money.
Fuel subsidy removal, unsecurity that threathened farmers mostly in North, high debt servicing. All contributed to the inflation we are facing.

Cbn gov accused Buhari regime of printing 22 trillion naira... Read more here
https://punchng.com/cbn-printing-of-n22tn-under-buhari-fueled-inflation-edun/


https://businessday.ng/big-read/article/commentary-with-nothing-to-show-nigerias-money-printing-spree-backfires/

004gist:
I didn't read much what u wrote...
But the first line us wrong. No theory support that.

When there is increase in money supply which is encouraged by low interest rate savings willl be low.
What prompt people to save is high interest rate.

So when there is high interest rate it encourages people to save. But it discourages investment.

To get it clear study the theory of saving and investment.
Like I said Buhari increase the money supply interest rate has been 11% up to 2020/2021. Buhari printed so much money.

The graph below is the money growth.


Summery.... Too much money in circulation via printing much money.
Fuel subsidy removal, unsecurity that threathened farmers mostly in North, high debt servicing. All contributed to the inflation we are facing.

Cbn gov accused Buhari regime of printing 22 trillion naira... Read more here
https://punchng.com/cbn-printing-of-n22tn-under-buhari-fueled-inflation-edun/


https://businessday.ng/big-read/article/commentary-with-nothing-to-show-nigerias-money-printing-spree-backfires/

Relax, you both are correct
There are different type of inflation and the solutions to solve them are different
There is cost push
There is demand pull
There are also other factors that causes inflation like, insecurity and others

Increase in interest rate is used to solve the inflation of too much money in circulation. But the inflation we are facing in Nigeria is caused by factors like insecurity, infrastructure, excessive importation.
Cardo is giving the wrong medicine

Ok, how much is your offer CEO?

RightChanneI:
You can submit your CV to my company!

PROPHET AYORINDE WARNED THIS ELERIBURUKU WÉRÉ CITIZEN, TO AVOID APC GOVERNMENT

004gist:
I didn't read much what u wrote...
But the first line us wrong. No theory support that.

When there is increase in money supply which is encouraged by low interest rate savings willl be low.
What prompt people to save is high interest rate.

So when there is high interest rate it encourages people to save. But it discourages investment.

To get it clear study the theory of saving and investment.
Like I said Buhari increase the money supply interest rate has been 11% up to 2020/2021. Buhari printed so much money.

The graph below is the money growth.

Although u won't know there is too much money in circulation because it's worthless... Today u easily see people holding 20k, 50k, taking it to makrjet just to buy foodstuff they will eat in 5 days but 10 years ago it's not like that

Summery.... Too much money in circulation via printing much money.
Fuel subsidy removal, unsecurity that threathened farmers mostly in North, high debt servicing. All contributed to the inflation we are facing.

Cbn gov accused Buhari regime of printing 22 trillion naira... Read more here
https://punchng.com/cbn-printing-of-n22tn-under-buhari-fueled-inflation-edun/


https://businessday.ng/big-read/article/commentary-with-nothing-to-show-nigerias-money-printing-spree-backfires/

I didn't read much what you wrote but I will advice you to study the economy of developed nations, you will understand the reason why they save more and why they encourage savings. Remember, you can't save what you don't have, it is when you have enough that you'll think of saving. So go back and read the short note I typed above!

Barzinime:
Ok, how much is your offer CEO?

I don't have time for childish interaction like this. Goodbye 👋

mayor02:
Relax, you both are correct
There are different type of inflation and the solutions to solve them are different
There is cost push
There is demand pull
There are also other factors that causes inflation like, insecurity and others

Increase in interest rate is used to solve the inflation of too much money in circulation. But the inflation we are facing in Nigeria is caused by factors like insecurity, infrastructure, excessive importation.
Cardo is giving the wrong medicine

He is saying there are too much money in circulation, that is the aspect I'm correcting him that there can't be too much money in circulation and many people still crying for food, hunger, etc..

mayor02:
Relax, you both are correct
There are different type of inflation and the solutions to solve them are different
There is cost push
There is demand pull
There are also other factors that causes inflation like, insecurity and others

Increase in interest rate is used to solve the inflation of too much money in circulation. But the inflation we are facing in Nigeria is caused by factors like insecurity, infrastructure, excessive importation.
Cardo is giving the wrong medicine

This is incorrect. Whether the inflation is driven by the supply or demand side, a hike in rates will still drive the other disequilibrium down back to balance, other things being equal. But that is basic economics. It may not work here because there is lack of policy coordination…irresponsible fiscal policies is making monetary policies ineffective due to crowding out effects. But CBN do not have much of a choice, they still have to do their own part.

Interest rate need to reflect the inflation factor. If interest rate is supposed to be 6% and inflation rate is 20%. You have to add it up and make the effective interest rate 26%. Else, no one will be willing to invest their money.
Imagine lending someone 100k (that can buy 3 bags of rice, for instance) and after one year he pays you back 106k, which now buys only 1 and half bags of rice.

Ironically, profit margin is usually 10-20%. So no way you can normally afford 26% cost of capital unless you want to rip off your customers. Reason why foreign investors shun our economy.

004gist:
I dont truly understand u but you should know that Buhari printed so much money and I think tinubu is doing same violating CBN core principles.

They print money n distribute through FAAC.
in 2010 FAAC allocation hardly pass 400 billion but now it's chasing 2 trillion. Has oil revenue increased? Or productivity increases? Answer is no

Abaseke of edo state once questioned this logic

That's the problem because the whole money is in their pocket and not in circulation. They loot those money back

RightChanneI:
I didn't read much what you wrote but I will advice you to study the economy of developed nations, you will understand the reason why they save more and why they encourage savings. Remember, you can't save what you don't have, it is when you have enough that you'll think of saving. So go back and read the short note I typed above!

You can't save because ur money is now worthless.
U take 5000 to buy ordinary fish. U take 9000 to 12000 to buy a paint of beans. U take 80,000 to buy a bag of rice. What does that tells u? Soo much money chasing few goods and this is what we call inflation... Galloping inflation.... Stageinflation because right now u guys facing high unemployment and inflation.
Same thing that happened in Zimbabwe.. Where people carry money in whellbarow. People are almost doing it, if not for people POS transfer etc. Imagine u want to buy food stuff for your wedding.. Or u want to buy a tokunbo car... I bet u.. U will carry that money in sacks.

Compare that with UK where I am. U want to buy same car.. Just 400 pounds is enough to get u a sound car unlike Nigeria 10 million.

U hardly see someone with 30,000 pounds hardly that's 2 to 3 year savings.