₦airaland Forum

The monetary policy committee (MPC) of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which benchmarks interest rates, from 26.75 percent to 27.25 percent.

Olayemi Cardoso, CBN’s governor, announced the 50 basis points increase at a press conference on Tuesday after the committee’s 297th meeting in Abuja.

Cardoso said the increase was to further tame inflation.

On September 16, the National Bureau of Statistics (NBS) said Nigeria’s inflation rate declined to 32.15 percent in August — the second time in 2024.

Also, the CBN governor said the committee retained the asymmetric corridor at +500 and -100 basis points around the MPR.

He said the committee also increased the cash reserve ratio (CRR) from 45 percent to 50 percent, while retaining the liquidity rate at 30 percent.

Cardoso said the MPC agreed to increase monitoring of future releases with a view to addressing its effect on price developments.

He also said the committee noticed the relative stability and convergence in the exchange rate across the various market segments resulting from the bank’s tight monetary policy stance.

The CBN governor said it will help improve confidence, which will enable economic agents to plan in the medium to long term.

“The committee was, however, unanimous in recognising that a lot more is required to actualise the bank’s price stability mandate,” he said.

“The MPC noted that even though headline inflation trended downwards due to a moderation in food inflation, core inflation has remained elevated, driven primarily by rising energy prices.

“The uptrend poses severe concerns to members as it clearly indicates the persistence of inflationary pressures. Members thus reiterated the need to work in close collaboration with the fiscal authority to address the current upward pressure on energy prices.

“The MPC noted the continued growth in money supply, recognising the need to curtail excess liquidity in the system as well as address foreign exchange demand pressures.”

‘FG HAS PLEDGED NOT TO DEPEND ON WAYS AND MEANS FOR FINANCING’

Cardoso said the MPC was worried about the fiscal deficits.

However, he said the federal government has pledged not to resort to ways and means for monetary financing.

“Members were also concerned about the growing level of fiscal deficit but acknowledged the commitment of the fiscal authority not to resort to monetary financing through ways and means,” he said.

‘LIFTING PETROL FROM DANGOTE REFINERY WILL REDUCE TRANSPORT COSTS’

Also, Cardoso applauded the federal government for the effort put into stabilising food prices.

He said the committee expressed optimism that “the lifting of refined petroleum products from Dangote Petroleum Refinery will moderate transportation costs and significantly support the easing of food price pressures in the short to medium term”.

“This is also expected to moderate foreign exchange demand for importation of refined petroleum products, with a positive spillover on external reserve and improvement in the overall balance of payment position,” he said.

Cardoso also applauded the ongoing efforts of the federal government of Nigeria to bridge the supply deficit through a duty-free import window for food commodities.

In addition, the CBN governor said the MPC “noted that the real policy rate remains negative, even after the recent moderation in headline inflation”.

“To attract investments into the economy, efforts must be sustained to achieve a positive real interest rate.” he said.

Cardoso it would enhance the economy’s competitiveness for foreign capital, thereby improving the exchange rate.

CodeTemplarr:
Ask them how the interest rate increase stops or reduces inflation and you will hear plenty of nothing. Grandstar, food is ready o.

thisisit:
SIGNS OF DEAD ECONOMY

1. Arbitrary increase of already high interest rates by Government
2. Arbitrary increase of already high tax rates by Government
3. Widening and deepening of tax nets by Government.
4. Arbitrary increase of tariffs by Government
5. Excessive and endless borrowing by Government.
6. ARBITRARY INCREASE OF PRICE OF ESSENTIAL COMMODITIES LIKE PETROL


EFFECT ON CITIZENS
1. Poverty and Hunger
2. Hardship and HOPELESSNESS
3. Protest and revolutionary citizens
4. Crimes , Conflict, Confusion

grandstar:
This is the problem with you: you never want to learn.

You prefer to proffer uneducated answers to economic issues.

Economics is about 400 years old if I'm correct. People are awarded Nobel prizes. It comes with a doctorate program. Someone can not rise up one morning, spurring rubbish, thinking he talking economics.

Go through that link and educate yourself.

For interest rates to work effectively, it must be higher than inflation.

https://www.google.com/amp/s/businessday.ng/big-read/article/cbn-mops-up-n1-51trn-in-four-months-to-stabilise-economy/%3famp

I want you to answer these 2 questions after reading the article.

1. Who are the target institutions in an OMO?

2. What does OMO stand for?

CodeTemplarr:
Ask them how the interest rate increase stops or reduces inflation and you will hear plenty of nothing. Grandstar, food is ready o.

grandstar:
This is the problem with you: you never want to learn.

You prefer to proffer uneducated answers to economic issues.

Economics is about 400 years old if I'm correct. People are awarded Nobel prizes. It comes with a doctorate program. Someone can not rise up one morning, spurring rubbish, thinking he talking economics.

Go through that link and educate yourself.

For interest rates to work effectively, it must be higher than inflation.

https://www.google.com/amp/s/businessday.ng/big-read/article/cbn-mops-up-n1-51trn-in-four-months-to-stabilise-economy/%3famp

I want you to answer these 2 questions after reading the article.

1. Who are the target institutions in an OMO?

2. What does OMO stand for?

CodeTemplarr:
Why is it not working then? Or is it working in your own opinion?

grandstar:
The interest rates need to be higher than inflation.

Presently, inflation is 33%, while the CBN rate is 28.5%. It needs to be higher than inflation to be effective.

Economist like to use a phrase "in real terms"

Recently, a microfinance bani through their bank wanted me to save with them, offering me 20% interest rates.

I rejected it because it was lower than inflation. Though it looked tempting, the fact the rate was lower than inflation, this put me off.

Saving rate - the inflation rate

20%-33% = -13%.

In real terms, I was losing 13%.

If they offered me 35%, I would most likely have jumped at it as I would make 2% in real terms.

Inflation is too high and it's hurting everyone.

grandstar:
This is the problem with you: you never want to learn.

You prefer to proffer uneducated answers to economic issues.

Economics is about 400 years old if I'm correct. People are awarded Nobel prizes. It comes with a doctorate program. Someone can not rise up one morning, spurring rubbish, thinking he talking economics.

Go through that link and educate yourself.

For interest rates to work effectively, it must be higher than inflation.

https://www.google.com/amp/s/businessday.ng/big-read/article/cbn-mops-up-n1-51trn-in-four-months-to-stabilise-economy/%3famp

I want you to answer these 2 questions after reading the article.

1. Who are the target institutions in an OMO?

2. What does OMO stand for?

iwaeda:
The monetary policy committee (MPC) of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which benchmarks interest rates, from 26.75 percent to 27.25 percent.

Olayemi Cardoso, CBN’s governor, announced the 50 basis points increase at a press conference on Tuesday after the committee’s 297th meeting in Abuja.

Cardoso said the increase was to further tame inflation.

On September 16, the National Bureau of Statistics (NBS) said Nigeria’s inflation rate declined to 32.15 percent in August — the second time in 2024.

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Also, the CBN governor said the committee retained the asymmetric corridor at +500 and -100 basis points around the MPR.

He said the committee also increased the cash reserve ratio (CRR) from 45 percent to 50 percent, while retaining the liquidity rate at 30 percent.

Cardoso said the MPC agreed to increase monitoring of future releases with a view to addressing its effect on price developments.

Advertisement


Advertisement
He also said the committee noticed the relative stability and convergence in the exchange rate across the various market segments resulting from the bank’s tight monetary policy stance.

The CBN governor said it will help improve confidence, which will enable economic agents to plan in the medium to long term.

“The committee was, however, unanimous in recognising that a lot more is required to actualise the bank’s price stability mandate,” he said.

“The MPC noted that even though headline inflation trended downwards due to a moderation in food inflation, core inflation has remained elevated, driven primarily by rising energy prices.

Advertisement


“The uptrend poses severe concerns to members as it clearly indicates the persistence of inflationary pressures. Members thus reiterated the need to work in close collaboration with the fiscal authority to address the current upward pressure on energy prices.

“The MPC noted the continued growth in money supply, recognising the need to curtail excess liquidity in the system as well as address foreign exchange demand pressures.”

‘FG HAS PLEDGED NOT TO DEPEND ON WAYS AND MEANS FOR FINANCING’

Cardoso said the MPC was worried about the fiscal deficits.

Advertisement
However, he said the federal government has pledged not to resort to ways and means for monetary financing.

“Members were also concerned about the growing level of fiscal deficit but acknowledged the commitment of the fiscal authority not to resort to monetary financing through ways and means,” he said.

‘LIFTING PETROL FROM DANGOTE REFINERY WILL REDUCE TRANSPORT COSTS’

Also, Cardoso applauded the federal government for the effort put into stabilising food prices.

He said the committee expressed optimism that “the lifting of refined petroleum products from Dangote Petroleum Refinery will moderate transportation costs and significantly support the easing of food price pressures in the short to medium term”.

“This is also expected to moderate foreign exchange demand for importation of refined petroleum products, with a positive spillover on external reserve and improvement in the overall balance of payment position,” he said.

Cardoso also applauded the ongoing efforts of the federal government of Nigeria to bridge the supply deficit through a duty-free import window for food commodities.

In addition, the CBN governor said the MPC “noted that the real policy rate remains negative, even after the recent moderation in headline inflation”.

“To attract investments into the economy, efforts must be sustained to achieve a positive real interest rate.” he said.

Cardoso it would enhance the economy’s competitiveness for foreign capital, thereby improving the exchange rate.

https://www.thecable.ng/breaking-cbn-increases-interest-rate-to-27-25/amp/

popesco123:
On tinubu manhood una stand.

Dougad:
Economic idiotic guru thinks raising awareness interest rate is going to help curb inflation as if the cause of our inflation is similar to those in developed countries where excess money in circulation is the problem.

What a stupid fool Tifnubu is

grandstar:
The interest rates need to be higher than inflation.

Presently, inflation is 33%, while the CBN rate is 28.5%. It needs to be higher than inflation to be effective.

Economist like to use a phrase "in real terms"

Recently, a microfinance bani through their bank wanted me to save with them, offering me 20% interest rates.

I rejected it because it was lower than inflation. Though it looked tempting, the fact the rate was lower than inflation, this put me off.

Saving rate - the inflation rate

20%-33% = -13%.

In real terms, I was losing 13%.

If they offered me 35%, I would most likely have jumped at it as I would make 2% in real terms.

Inflation is too high and it's hurting everyone.

grandstar:
The interest rates need to be higher than inflation.

Presently, inflation is 33%, while the CBN rate is 28.5%. It needs to be higher than inflation to be effective.

Economist like to use a phrase "in real terms"

Recently, a microfinance bani through their bank wanted me to save with them, offering me 20% interest rates.

I rejected it because it was lower than inflation. Though it looked tempting, the fact the rate was lower than inflation, this put me off.

Saving rate - the inflation rate

20%-33% = -13%.

In real terms, I was losing 13%.

If they offered me 35%, I would most likely have jumped at it as I would make 2% in real terms.

Inflation is too high and it's hurting everyone.