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CBN Drops Interest Rates By 50bps To 13.50% - Business (2) - Nairaland

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Re: CBN Drops Interest Rates By 50bps To 13.50% by chloride6: 3:08pm On Mar 26, 2019
candlewax:
commendable but they should make forex available to traders. Traders and importers held the economy and provided needs all those while things were difficult before industrialists saw the changes in the economy and we're attracted because it's now lucrative. Importers shouldn't be dumped in the gutters and BOI should extend loans to traders to cash in from industrialization and not only support existing industries

Forex is freely available to everyone at least at black market rate.
Re: CBN Drops Interest Rates By 50bps To 13.50% by chloride6: 3:09pm On Mar 26, 2019
Just2endowed2:
should have been drop to 12%....i think they said inflation has reduced

This is a huge gamble considering that the Feds just raised rates..

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Re: CBN Drops Interest Rates By 50bps To 13.50% by Nobody: 3:11pm On Mar 26, 2019
GrossPrice:
Treasury bills rates going to be lower angry
What is the rate now sef?
Re: CBN Drops Interest Rates By 50bps To 13.50% by Dellfoam(m): 3:12pm On Mar 26, 2019
It's a welcome development.

Just following
Re: CBN Drops Interest Rates By 50bps To 13.50% by Enuoyan: 3:12pm On Mar 26, 2019
I thought they said that the man's tenure has ended!!! How come it is only during this injury time that he suddenly realise that he has to reduce the rate
Re: CBN Drops Interest Rates By 50bps To 13.50% by Nobody: 3:16pm On Mar 26, 2019
chloride6:


Forex is freely available to everyone at least at black market rate.

If importers and industries rely on black market, before the year runs out NLC will demand another increment on minimum wage ostensibly. Importers of certain goods are also banned from obtaining forex at the apex bank's rate
Re: CBN Drops Interest Rates By 50bps To 13.50% by tobaaro(m): 3:16pm On Mar 26, 2019
candlewax:
commendable but they should make forex available to traders. Traders and importers held the economy and provided needs all those while things were difficult before industrialists saw the changes in the economy and we're attracted because it's now lucrative. Importers shouldn't be dumped in the gutters and BOI should extend loans to traders to cash in from industrialization and not only support existing industries

With all due respect, the foregoing postulation is misguided. Our economy needs Manufacturing roots and not the continued trade in Imported items. Asking BOI to fund importation is travesty and will only enrich some while further destroying the Economy by stiffling ability of Local Companies to compete.

#My2cents

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Re: CBN Drops Interest Rates By 50bps To 13.50% by Kaa4(m): 3:16pm On Mar 26, 2019
Just2endowed2:
should have been drop to 12%....i think they said inflation has reduced
.

You are the only one comparing the comparables. The issue of Forex rates and the attendant capital flight has to be addressed as well. But good to test the waters with the reduction.

1 Like

Re: CBN Drops Interest Rates By 50bps To 13.50% by Nobody: 3:17pm On Mar 26, 2019
oge4real:
Do people actually borrow at such exorbitant rates.
Imagine taking out mortgage on rate for a 25 year term!
I’m no economist but I won’t advise anyone to borrow at any rate more than single digit.

People do and somehow survive
Re: CBN Drops Interest Rates By 50bps To 13.50% by slimthugchimee2(m): 3:18pm On Mar 26, 2019
InvertedHammer:
/
Too high.

Unrealistic.


Ghana 8.9%
Egypt 9%
Rwanda 9%
Uganda 9%

South Africa 8.78%

Nigeria 13.5%
/

Where did you get this your statistics from? Last time I checked, Ghana is 20%
Egypt 16.5

Uganda is 10%

sad
Re: CBN Drops Interest Rates By 50bps To 13.50% by Nobody: 3:24pm On Mar 26, 2019
tobaaro:


With all due respect, the foregoing postulation is misguided. Our economy needs Manufacturing roots and not the continued trade in Imported items. Asking BOI to fund importation is travesty and will only enrich some while further destroying the Economy by stiffling ability of Local Companies to compete.

#My2cents

I never said the BOI should fund importation of finished goods, that's absurd. I merely hoped that they fund importers to build industries too because ATM they only support existing industries and most importers do not have the capacity to set up an industry with out the support of BOI thereby leaving them with no option than import, in some cases smuggle as survival is non negotiable
Re: CBN Drops Interest Rates By 50bps To 13.50% by oge4real(f): 3:28pm On Mar 26, 2019
candlewax:


People do and somehow survive

That must be hard to payback though
Re: CBN Drops Interest Rates By 50bps To 13.50% by Enuoyan: 3:29pm On Mar 26, 2019
For many years, since July 2016, this man has refused to bring down interest rate, how come it is now that his tenure is expiring that he suddenly realised that the rate should be reduced?
Re: CBN Drops Interest Rates By 50bps To 13.50% by chloride6: 3:35pm On Mar 26, 2019
candlewax:


If importers and industries rely on black market, before the year runs out NLC will demand another increment on minimum wage ostensibly. Importers of certain goods are also banned from obtaining forex at the apex bank's rate


There is so much liquidity in the FX market such that the spread on the black market is so small right now...
Re: CBN Drops Interest Rates By 50bps To 13.50% by chloride6: 3:36pm On Mar 26, 2019
Enuoyan:
For many years, since July 2016, this man has refused to bring down interest rate, how come it is now that his tenure is expiring that he suddenly realised that the rate should be reduced?

Go and sit down...

It took the human face of Emifiele not to increase the rates...


Anyway the rates were psuedo increased in the past years..
Re: CBN Drops Interest Rates By 50bps To 13.50% by Yankee101: 3:37pm On Mar 26, 2019
TeamSimple:

Ever if they put at 1% you will ask for no rate

Yep. I see why you're team simple
Re: CBN Drops Interest Rates By 50bps To 13.50% by Nobody: 3:37pm On Mar 26, 2019
chloride6:



There is so much liquidity in the FX market such that the spread on the black market is so small right now...



You are right but that tiny spread might be all one need if you consider volume
Re: CBN Drops Interest Rates By 50bps To 13.50% by chloride6: 3:37pm On Mar 26, 2019
slimthugchimee2:


Where did you get this your statistics from? Last time I checked, Ghana is 20%
Egypt 16.5

Uganda is 10%

sad


The guy is quoting figures from his yansh
Re: CBN Drops Interest Rates By 50bps To 13.50% by chloride6: 3:39pm On Mar 26, 2019
candlewax:


You are right but that tiny spread might be all one need if you consider volume

The current restrictive FX policy is the best....

We have to discourage frivolous importation.
Re: CBN Drops Interest Rates By 50bps To 13.50% by Nobody: 3:41pm On Mar 26, 2019
chloride6:


The current restrictive FX policy is the best....

We have to discourage frivolous importation.

No doubts hence the need for BOI to fund start ups too
Re: CBN Drops Interest Rates By 50bps To 13.50% by chloride6: 3:43pm On Mar 26, 2019
candlewax:


No doubts hence the need for BOI to fund start ups too

There are a lot of govt agencies funding key start ups..

BOI, NSIA , InfraCredit to mention a few...

The next 4 years is going to be a hit...
Re: CBN Drops Interest Rates By 50bps To 13.50% by Nobody: 3:44pm On Mar 26, 2019
chloride6:


There are a lot of govt agencies funding key start ups..

BOI, NSIA , InfraCredit to mention a few...

The next 4 years is going to be a hit...


Thats the claim but the truth is that they only fund existing industries
Re: CBN Drops Interest Rates By 50bps To 13.50% by chloride6: 3:45pm On Mar 26, 2019
candlewax:


Thats the claim but the truth is that they only fund existing industries

Most startups will die in 1 year...

Why should govt waste money
Re: CBN Drops Interest Rates By 50bps To 13.50% by Moukandjo: 3:48pm On Mar 26, 2019
Election gimmick! We will not fall for it! I am Obediently Atikulating!
Re: CBN Drops Interest Rates By 50bps To 13.50% by Nobody: 3:52pm On Mar 26, 2019
chloride6:


Most startups will die in 1 year...

Why should govt waste money

They should find a way round it, with more industries providing goods with reasonable pricing and durability, smuggling and importation will die naturally
Re: CBN Drops Interest Rates By 50bps To 13.50% by samlake(m): 4:49pm On Mar 26, 2019
It should come down further, other Africans country do less than that...
Re: CBN Drops Interest Rates By 50bps To 13.50% by courage89(m): 4:56pm On Mar 26, 2019
chloride6:


There are a lot of govt agencies funding key start ups..

BOI, NSIA , InfraCredit to mention a few...

The next 4 years is going to be a hit...


In what capacity are they funding startups? Loans, grants, equity, hybrid?
Re: CBN Drops Interest Rates By 50bps To 13.50% by chloride6: 4:59pm On Mar 26, 2019
courage89:


In what capacity are they funding startups? Loans, grants, equity, hybrid?

hybrid...mostly equity though
Re: CBN Drops Interest Rates By 50bps To 13.50% by Nobody: 5:00pm On Mar 26, 2019
see as the 50 basis point sound like 50% , instead of them to say 0.05%, bankers are con artist.

how do you stimulate the economy with that rate, whats d difference between 14 and 13.5.
Re: CBN Drops Interest Rates By 50bps To 13.50% by b03liberty(m): 5:00pm On Mar 26, 2019
13% won't be a bad one. The economy has to stimulate after a long period of contraction... Election and recovery from recession
Re: CBN Drops Interest Rates By 50bps To 13.50% by courage89(m): 5:10pm On Mar 26, 2019
chloride6:


hybrid...mostly equity though


Do you by any chance have information on companies that have benefited from these types of investments?
Re: CBN Drops Interest Rates By 50bps To 13.50% by Truth234(m): 5:17pm On Mar 26, 2019
oge4real:
Do people actually borrow at such exorbitant rates.
Imagine taking out mortgage on rate for a 25 year term!
I’m no economist but I won’t advise anyone to borrow at any rate more than single digit.

No, they will even pay higher, between 25% to 30%. What you see here is benchmark rate. Lenders will add operating cost and service charge.

In fact, the improved borrowing cost of 13.5% is not realistic on a long-term as the CBN is merely taking advantage of slowing global growth and the surge in the risk associated with developed economies. Improved crude oil outlook, reducing inflation rate and uncertainties in developed economies are three reasons why the MPC lowered rate today, knowing no matter what, foreign investors will still embrace 13.5% as it is still higher than offerings from developed economies.

If you are still interested in knowing why the move, read the breakdown I did on it earlier today. https://investorsking.com/cbn-reduces-interest-rate-by-50bps/

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