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Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by EternalTruths: 2:12pm On Sep 22, 2016 |
americanigga: Those countries you mentioned, what is their inflation rate. If you took your economics classes serious, you would have known that the gap between interest rate and inflation rate are not too far apart Real Interest rate= Norminal Interest rate + Inflation rate You don't expect our Real interest rate to be very far from our inflation rate. So find out the inflation rate of those countries and minus them Do same for Nigeria |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by Image123(m): 2:29pm On Sep 22, 2016 |
Try to be objective, it will help your health. blueto:With OVER [url=http://www.dmo.gov.ng/oci/pubd/docs/Total%20Public%20Debt%20Stock%20as%20at%2031st%20March,%202015.pdf]$66.5 billion public debt[/url], remember or know from today. Also, note that this debt has somehow reduced and not increased [url=http://www.dmo.gov.ng/oci/pubd/docs/Total%20Public%20Debt%20as%20at%2030th%20%20June%202016.pdf]as at June 2016 to $61.4[/url]. The GEJ administration makes Buhari look like a bible days Joseph-Saviour of some kind. – $2.5billion Sovereign Wealth Fund,i don't have details about this, but i know it is some kind of savings fund. The FG has not withdrawn from it, and you would be the first to complain if they did. Also, it yielded interest, the last i heard, so what is your complaint? – $1.4billion in the ECA,It is said to currently excess crude account, currently stands at $2.91bn. That is an account that almost ran down under the ineffectual past administration despite EXCESS crude earnings. – $4.65b back taxes from NLNG.Please do not be deceitful, we are not small children here or lacking memory. There was NOTHING known about NLNG back taxes until Buhari administration. i remember when Buhari collected it and used it to help the 36 states, and people began to demand for the past. Here was PDP's explanation. Mr. Metuh said the truth is that the NLNG had been on a 10-year tax haven until 2014. “Within this period, successive governments, right from President Olusegun Obasanjo never shared nor tampered with the cumulative dividends over the years,” he said. The federal government had last week shared over $2.1 to the three tiers of government. It said the money came from the payments made by the NLNG and other sources in the middle of June 2015. Mr. Mohammed had claimed the payment so shared is the first time such lodgements was being disclosed by any government, in addition to paying it into the Federation Account for sharing. However, Mr. Metuh said whatever taxes paid from the NLNG in the past went through the Federal Inland Revenue Services, FIRS, and recorded as part of the income of the Federal Government. – Buhari met an approved budget of N4.5trillionApproved budget with no money to run it. It is like me approving that you go and collect 1billion dollars at the bank, pretty useless because there is no such money there. Buhari received within a year:Propaganda, get your facts right. You don't have to be spoonfed on everything. i am sure you are one of those that Fayose has the remote to their brain and would believe that Buhari does not excrete if Fayose says so. – 3trilion on STASo? More than a year has passed:More false news. [s]7] 4.3 Million jobs lost in 10months – National Bureau of Statistics. Even more propaganda. Get your facts right, and stop this intellectual laziness, this is not election or campaign period. Serious people should be interested in governance and not all this blinded politics. 2 Likes 1 Share |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by Shym3xx: 7:57pm On Sep 22, 2016 |
EternalTruths: Sorry for the late reply. And I also edited the bits where you cited Buhari and Northerners. Whatever he and his Northern brothers are doing isn't my prerogative. I want to keep this back and forth within the context of the topic, which is: interest rates. That said, I honestly don't think you understand what you're talking about. Once you cut the interest rates: it will have a ripple effect on the manufacturing/production/agricultural sectors and also the consumers. Thus increasing consumer spending, creating jobs, and making the country self-sustainable. And nothing drives growth, while reducing inflation more than consumer spending - especially when the production sector is booming and there is self-sustainability. It will also make the economy more attractive to investors. You can lower the taxes, reduce electricity tariffs, and reduce fuel prices all you want. However, when there are no jobs and the consumers have no money to spend - how's that going to change anything? Without further ado: I'll refer you to what was do in other climes to combat recession. I'm going to cite excerpts from three different economies and you can read the articles for better understanding on economic policies: 1). United States Fed cuts interest rates to near zero to combat economic recession 2). United Kingdom Bank of England cuts Bank Rate to 0.25% and introduces a package of measures designed to provide additional monetary stimulus 3). Russia Russian central bank cuts interest rate further—down to 10 percent Let what I posited in this post sink in and come back with a better rebuttal, without going on a tangent this time around. I also cited three examples that happened in civilised climes recently in the last two months. 2 Likes 1 Share |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by EternalTruths: 10:15pm On Sep 22, 2016 |
Shym3xx: Look at the highlighted point of yours Now answer this question Consumer spending on what type of products. Is it on local or foreign products.? You fail to understand the difference between Nigerian economy and the economies you mentioned is that we are not a robust manufacturing economy. So when you lower interest rate to increase money supply, the money is spent on foreign products or semi finished products. This put more pressure on our meagre FOREX leading to higher cost of foreign goods/services as businesses acquire dollars at an expensive price. Take note: Our economy is not a robust manufacturing economy like US Britain Russia etc That is why I advocate that we take our Technological education serious and we should find ways to Commercialize our indigenous technologies developed in our schools. Until that is done, we will always be at the mercy of FOREX wahala needed to meet our demand for modern goods/services which are mostly foreign based Techs. |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by Shym3xx: 10:53pm On Sep 22, 2016 |
EternalTruths: Consumer spending on both local and imported goods. No country on the planet depends solely on only locally made goods. The most important thing is for local manufacturers to be productive and competitive and for consumer spending to increase. Thus driving up growth and that will effectively cut down inflation. It will also stabilise the naira. The problem with your reasoning is that you're only focusing on the consumers, especially in a country like naij where the lending facility won't be accessible to most consumers. Those who will benefit from it the most are the drivers of the economy and it will trickle down to the consumers. The Russian economy is very similar to the Nigerian economy albeit there are nuances. Russia is also heavily dependent on gas. 4 Likes 1 Share |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by EternalTruths: 12:09am On Sep 23, 2016 |
Shym3xx: Look at your point which I highlighted red Remember that our FOREX is low and that because our interest rate has increased to 14%, we have successfully attracted $1bn to our FOREX reserve Now to the killer punch 1) When these economic drivers as you said, go to the banks to borrow more money due to a lowered interest rate, the things they buy to expand their operations, will those things be bought locally or imported.? 2) If those things are imported, have you asked yourself the implications on our FOREX.? 3) Now when you lower interest rate, the quantity of FOREX entering our economy reduces and the pressure on our limited FOREX increases. Don't you think it is best to leave the rates where it is and reduce others like Taxation Fuel and Energy costs if we desire to support the drivers of the economy.? The problem you have not identify is that we are a Technological unserious Nation. Russia FOREX is heavily oil and gas dependant but don't forget that the Russians can manufacture almost everything they want because they are Technologically advanced. So for this reason, can weather the storm better than us. Technological education is the key to this problem. Ask yourself these simple questions below All the phones we use, how many are produced locally.? If none, why aren't they produced locally.? Will Nigerians survive FOREX instability if we can manufacture most of our technologies locally.? If yes, why aren't we manufacturing locally.? Technological education and Commercialization of our indigenous technologies developed in our schools are keys to this problem. |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by EternalTruths: 12:27am On Sep 23, 2016 |
If Nigerians are a technological serious people, this high cost of dollars will favour us because 1) more Nigerians will buy local products that are as good as foreign products due to our sophisticated level of technology 2) lots of Nigerians will be discouraged from buying foreign products due to high cost 3) Foreigners will be discouraged from dumping their foreign products on our soil due to high price 4) Foreigners will be encouraged to buy our local products and export due to cheap price. This is the secret behind China and Japan devaluation of their currencies against the dollars. Shym3xx , technology remains the key. Pls read the other post above. |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by EternalTruths: 12:51am On Sep 23, 2016 |
AZeD1: You and the people that gave you 8 likes please read https://www.nairaland.com/3365622/external-reserves-drop-24bn |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by EternalTruths: 12:52am On Sep 23, 2016 |
idupaul: The beautiful nonsense is becoming real Please read https://www.nairaland.com/3365622/external-reserves-drop-24bn |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by EternalTruths: 12:54am On Sep 23, 2016 |
vedaxcool: Fallacy becomes real Please read https://www.nairaland.com/3365622/external-reserves-drop-24bn |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by EternalTruths: 12:57am On Sep 23, 2016 |
JAkpayen: Blueto drss2 Please read so that those supporting Kemi will see the danger of following her https://www.nairaland.com/3365622/external-reserves-drop-24bn |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by iambrafia231: 3:53am On Sep 23, 2016 |
Emefiele is Nigeria biggest problem and until he is sack we may remain in this recession for a longer time. He is not sure at all about what to do, he is on demo on all major policy decisions he has made. 1 Like 1 Share |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by drss2(m): 7:07am On Sep 23, 2016 |
EternalTruths:d only tin dat will drag nigeria out of recession is for buari to resign n nigeria returns to regionalism. |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by orisa37: 8:35am On Sep 23, 2016 |
Nigeria has gone beyond these simple economic theories. Many factories are closed down because of no Sales and patronage to move their Products. Workers are laid off cos no money to pay wages. No money to maintain dilapidated Machines and Equipment and you can't borrow at high interest to do all these and be able to pay back when the Market is not fluid enough to move your Products. The Ministry of Finance is picketing to remove Adeosun and not the PS or the CBN, cos their Salaries have not been paid. There's no money in circulation, because there is no Production. The Minister cannot borrow money at high interest to pay just salaries when there will be no Production and Sales Revenue Earnings to pay back principal and its high interest demands. Emefiele doesn't know the Practical. That's why Buhari must ease him out and deploy Adeosun to CBN as Governor. If NOI cannot be brought, then bring back Soludo because he's skilful with the application of the Principle and Practice of Denomination of Forex transactions. And with either NOI or Soludo as Minister of Finance and Adeosun as CBN GOVERNOR neither MTN nor even Dangote will dare our F.G Forex Transaction Prowess. |
Re: Interest Rate: Why Emefiele Is Right Not To Reduce It Now. by orisa37: 8:40am On Sep 23, 2016 |
Emefiele isn't right. |
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