₦airaland Forum

APCHaram:
This is total nonsense.

As stupid as this govt is, this policy of easing on borrowing is not a bad idea towards stimulating investments and consumer spending. The only thing the CBN has to do is reduce lending rates so as not to over inflate the economy.

These useless banksters have double standards when viewing developing and western economies.

The Federal reserves has a 0% lending rate for banks and loan rates are hovering at no more than 3% and 15% for business and consumer loans respectively.

Buhari is a dunce, agreed but these jew rat banksters need to be ignored.

isthatso:
you need to brush up on your economics, reducing interest rates actually causes inflation as it makes borrowing cheaper, cause more spending and hence prices to rise. Increasing does the opposite.

APCHaram:
Not in the case of Nigeria where consumption has dipped significantly owing to economic depression.

There are too many goods and services available but very low patronage owing to austerity.

APCHaram:
This is total nonsense.

As stupid as this govt is, this policy of easing on borrowing is not a bad idea towards stimulating investments and consumer spending. The only thing the CBN has to do is reduce lending rates so as not to over inflate the economy.

These useless banksters have double standards when viewing developing and western economies.

The Federal reserves has a 0% lending rate for banks and loan rates are hovering at no more than 3% and 15% for business and consumer loans respectively.

Buhari is a dunce, agreed but these jew rat banksters need to be ignored.

sylve11:
but make we talk truth small, GEJ fucck up too. Our leaders are mad people. their brains wear torn rags.

Nbote:
Noooo PMB is d best thing to have happened to dis country since afta jollof rice.. All d policy somersault is caused by d PDP and GEJ and presently by Atiku

DuxofMen:
My thoughts exactly. Very soon, a lot of uninformed jobbers will jump on the back of this uningenious idea to castigate the federal government, for the simple reason that they hate Buhari. In their own countries, almost every body has a credit card. Any sensible body knows that lack of access to finance by Nigerian msmes has contributed in no small way to a stagnation of the Nigerian economy. Finally the central bank is forcing greedy and shyllock banks, (who ordinarily declare huge profits at the end of each financial year), into lending more and the likes of Fitch are not happy about it. They must be mad in that place.

Chidexter:
Their entire write up, proposition and analysis doesnt have, RUga, or FUlani in it, therefore it would be ignored by the FG

grandstar:
I pity foreign portfolio investors who have pumped money into treasury bills. Were the Naira to devalue unexpectedly, they'll lose heavily.

Anyway, irresistible double digits rates have lured them in compared to the pittance available in the rich countries. They had better keep their ears to the ground and flee before anyone else, before the poo hits the fan.

Emefiele' s poor attempt at picking winners will see it losing hundreds of billions in lending to zombie companies. His persistent refusal to allow creative destruction do it's work and perennial meddling by him and the president is taking a toll on the economy

Reference:
In your opinion what has the effects of TSA been on the economy since we have entered an era whete government is perceived to be a better manager of resources than the citizens or shall we say the private sector. Why can't TSA be suspended for a season.

nwakibie3:
Fitch, a credit ratings international organisation has disclosed that the Central bank of Nigeria (CBN) under President Muhammadu Buhari might drag the Nigerian economy in crisis due to mismatch in economic policy management.

In the latest report released by Fitch, titled Nigeria’s Unconventional Policies Aggravate External Vulnerability, the organisation stated that the CBN’s recent attempt to boost economic activity through giving incentives to banks’ lending had clashed with the goal of maintaining a stable exchange rate, and this is not good for the economy.

Uncoordinated policies: Fitch noted that the CBN’s policy moves to reconcile competing goals through unconventional macroeconomic management and weaknesses in policy settings were raising medium-term vulnerabilities to shocks, and this could expose the economy more to falling oil prices or disruptions to hydrocarbon production.

- According to the report, tight management of domestic liquidity had been the key pillar of Nigeria’s exchange-rate policy in recent years.

- However, the recent measures to boost lending have contributed to a temporary loosening of domestic financing conditions. This has combined with falling oil prices and deteriorating investor sentiment towards emerging markets to put pressure on the naira.

- Specifically, one of the major policies cited by Fitch is the policy implemented in July, which includes a requirement for banks to have a loans-to-deposits ratio of at least 60% by the end of September and tighter restrictions on the amount of remunerable deposits that banks can park at the Central Bank.

Macroeconomic Pressures: Also, it was stated that exchange rate movement pressured the CBN to resume its liquidity tightening operations in August by auctioning Open Market Operations (OMO) bills, and to increase the supply of foreign currency, releasing about $800 million from its foreign-currency reserves between mid-July and mid-August.

- According to Fitch, these moves by the CBN have contributed to a rebound in domestic interest rates and limited the depreciation of the naira on the Investors’ and Exporters’ FX Window by 1% since the end of June.

- Hence, Fitch noted that the competing goals of preserving naira stability and supporting Nigeria’s fragile recovery were pushing the CBN towards increasingly complex policy measures, with a risk of aggravating external vulnerability or causing macroeconomic distortions.

- Fitch stated that the CBN’s policy of auctioning OMO bills to non-residents had led to a rapid build-up of short-term external liabilities with non-resident holdings of these bills amounting to $15.8 billion (4% of GDP) at end-April, equivalent to a third of reserves. This generates meaningful rollover risks, which could necessitate persistently high-interest rates, holding back growth and increasing the government’s debt-servicing costs

FOREX restriction on milk and food items: Fitch identified CBN’s recent move to intensify restrictions on FOREX access for imports that were imposed in 2015. While the President of Nigeria, Muhammadu Buhari, recently called on the CBN to end FOREX for milk importers, the President has also announced restriction of FX access for all food imports, but according to Fitch, the scope, modalities and timeline of such measures remain unclear.

Also according to Fitch, FX restrictions are unlikely to foster expansion in the domestic food supply, as Nigeria’s agricultural and food sectors suffer from deep-seated challenges from infrastructure gaps, communal conflicts, insecurity and weather hazards. Instead, these restrictions could push more traders towards the informal economy and compound inflationary pressures.

On Nigeria’s inflation, Fitch noted that Nigeria’s Inflation at about 11% already raises the risk of an overvaluation of the real effective exchange rate, which could put more pressure on the naira and increase the risk of a sharp adjustment following an oil price shock. Withdrawal of portfolio investors would aggravate the potential balance of payment pressures.



https://nairametrics.com/2019/08/28/buharis-cbn-policies-may-drag-nigerian-economy-into-crisis-fitch/

nwakibie3:
Fitch, a credit ratings international organisation has disclosed that the Central bank of Nigeria (CBN) under President Muhammadu Buhari might drag the Nigerian economy in crisis due to mismatch in economic policy management.

In the latest report released by Fitch, titled Nigeria’s Unconventional Policies Aggravate External Vulnerability, the organisation stated that the CBN’s recent attempt to boost economic activity through giving incentives to banks’ lending had clashed with the goal of maintaining a stable exchange rate, and this is not good for the economy.

Uncoordinated policies: Fitch noted that the CBN’s policy moves to reconcile competing goals through unconventional macroeconomic management and weaknesses in policy settings were raising medium-term vulnerabilities to shocks, and this could expose the economy more to falling oil prices or disruptions to hydrocarbon production.

- According to the report, tight management of domestic liquidity had been the key pillar of Nigeria’s exchange-rate policy in recent years.

- However, the recent measures to boost lending have contributed to a temporary loosening of domestic financing conditions. This has combined with falling oil prices and deteriorating investor sentiment towards emerging markets to put pressure on the naira.

- Specifically, one of the major policies cited by Fitch is the policy implemented in July, which includes a requirement for banks to have a loans-to-deposits ratio of at least 60% by the end of September and tighter restrictions on the amount of remunerable deposits that banks can park at the Central Bank.

Macroeconomic Pressures: Also, it was stated that exchange rate movement pressured the CBN to resume its liquidity tightening operations in August by auctioning Open Market Operations (OMO) bills, and to increase the supply of foreign currency, releasing about $800 million from its foreign-currency reserves between mid-July and mid-August.

- According to Fitch, these moves by the CBN have contributed to a rebound in domestic interest rates and limited the depreciation of the naira on the Investors’ and Exporters’ FX Window by 1% since the end of June.

- Hence, Fitch noted that the competing goals of preserving naira stability and supporting Nigeria’s fragile recovery were pushing the CBN towards increasingly complex policy measures, with a risk of aggravating external vulnerability or causing macroeconomic distortions.

- Fitch stated that the CBN’s policy of auctioning OMO bills to non-residents had led to a rapid build-up of short-term external liabilities with non-resident holdings of these bills amounting to $15.8 billion (4% of GDP) at end-April, equivalent to a third of reserves. This generates meaningful rollover risks, which could necessitate persistently high-interest rates, holding back growth and increasing the government’s debt-servicing costs

FOREX restriction on milk and food items: Fitch identified CBN’s recent move to intensify restrictions on FOREX access for imports that were imposed in 2015. While the President of Nigeria, Muhammadu Buhari, recently called on the CBN to end FOREX for milk importers, the President has also announced restriction of FX access for all food imports, but according to Fitch, the scope, modalities and timeline of such measures remain unclear.

Also according to Fitch, FX restrictions are unlikely to foster expansion in the domestic food supply, as Nigeria’s agricultural and food sectors suffer from deep-seated challenges from infrastructure gaps, communal conflicts, insecurity and weather hazards. Instead, these restrictions could push more traders towards the informal economy and compound inflationary pressures.

On Nigeria’s inflation, Fitch noted that Nigeria’s Inflation at about 11% already raises the risk of an overvaluation of the real effective exchange rate, which could put more pressure on the naira and increase the risk of a sharp adjustment following an oil price shock. Withdrawal of portfolio investors would aggravate the potential balance of payment pressures.



https://nairametrics.com/2019/08/28/buharis-cbn-policies-may-drag-nigerian-economy-into-crisis-fitch/

Nbote:
Noooo PMB is d best thing to have happened to dis country since afta jollof rice.. All d policy somersault is caused by d PDP and GEJ and presently by Atiku... Infact IPOBs are responsible for d policies not working as dey are supposed to.. D policies are actually working perfectly jus dat it's effects are so bright we can't see it yet

Burger01:
Buhari again

Who cursed Nigeria with this dullard of a president

We are tired of this dullard..

He should just go..

APCHaram:
This is total nonsense.

As stupid as this govt is, this policy of easing on borrowing is not a bad idea towards stimulating investments and consumer spending. The only thing the CBN has to do is reduce lending rates so as not to over inflate the economy.

These useless banksters have double standards when viewing developing and western economies.

The Federal reserves has a 0% lending rate for banks and loan rates are hovering at no more than 3% and 15% for business and consumer loans respectively.

Buhari is a dunce, agreed but these jew rat banksters need to be ignored.

Nbote:
Noooo PMB is d best thing to have happened to dis country since afta jollof rice.. All d policy somersault is caused by d PDP and GEJ and presently by Atiku... Infact IPOBs are responsible for d policies not working as dey are supposed to.. D policies are actually working perfectly jus dat it's effects are so bright we can't see it yet

APCHaram:
This is total nonsense.

As stupid as this govt is, this policy of easing on borrowing is not a bad idea towards stimulating investments and consumer spending. The only thing the CBN has to do is reduce lending rates so as not to over inflate the economy.

These useless banksters have double standards when viewing developing and western economies.

The Federal reserves has a 0% lending rate for banks and loan rates are hovering at no more than 3% and 15% for business and consumer loans respectively.

Buhari is a dunce, agreed but these jew rat banksters need to be ignored.