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Nairaland Forum / Nairaland / General / Business / All You Need To Know About The Cbn’s Latest MPR And How It Affects The Economy (91 Views)
CBN Raises Benchmark MPR By 200 Basis Points To 24.75% / CBN Raises MPR To 13% From 11.5% / Aishah Ahmad: Profile Of The CBN Deputy Governor (2) (3) (4)
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All You Need To Know About The Cbn’s Latest MPR And How It Affects The Economy by Rosabonnigeria: 2:52pm On Jun 28 |
What is MPR? The Monetary Policy of an economy is a method by which the monetary authority of the country controls the money supply and rate of interest in the market. With the right of monetary policies inflation, consumption, growth and, liquidity in the economy can be managed. Now let’s bring it home. In Nigeria, the MPR is determined by the Central Bank of Nigeria - CBN to influence the cost of borrowing in the country. So What’s The News About It? In recent times, life has become tougher for the average Nigerian with the prices of goods and services constantly skyrocketing. This has affected (almost) everyone and something needs to be done about it right? This is where the CBN comes in. On Monday, 21st May 2024, the Central Bank of Nigeria - CBN raised the MPR significantly by 150 base points to 26.25% per cent from 24.75% per cent during its 295th Monetary Policy Committee (MPC) meeting. Why Was The MPR Increased? The major aim of increasing the MPR is to curb inflation by slowing down money circulation. According to the CBN Governor, Yemi Cardoso, the new rate was focused on reducing current inflationary pressures and ensuring sustained exchange rate stability. He further stated that the new MPR was part of moves to tackle the country’s inflation which is currently at 33.69%, stabilise the economy and restore the purchasing power of the average Nigerian. What Are Experts Saying About This Move & Its Impact on The Economy? As expected there are various reactions to this move as economic experts are on different divides. Olumide Adesina, a financial analyst projects that the high interest rates maintained by CBN will make naira-denominated assets more appealing. He added that this will stabilize the Nigerian FX market and boost confidence in the naira while buying some time for the fiscal side. On the other hand, Dele Oye, the National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture said the increasing interest rates will make it even more difficult for the private sector to access affordable credit. Paul Alaje, a Chief Economist is on the same page as Oye. He is of the opinion that continuous rate hikes without considering broader economic impacts can crowd out investments, affect growth, and lead to a recession. How Does It Affect You? - Higher Borrowing Cost: What this new MPR rate means for you is that you will now be charged higher interest rates at the bank. Individuals and organizations will now have to deal with a higher borrowing cost which can discourage you from taking out loans. - Higher Investment Rates: While you may now pay higher interest for credit facilities, banks may now be able to give you higher interest rates on your savings. A win if we may add 😊😊 - Reduced consumer spending: Since it is now more expensive to access loans from banks, consumer spending will reduce too as people become more cautious about taking on additional debt. MPR Changes So Far This Year February 26 - 27, 2024: From 18.75% to 22.75% March 25 - 26, 2024: From 22.75% to 24.75% May 20 - 21, 2024: From 24.75% to 26.25% Last Notes: While there are divided opinions about this move by the apex bank, we can only hope these changes by the CBN move the country forward economically. Last Last Notes 😊: We know we said last note, but we have a little favour to ask you. If you’ve found this post helpful (which we know you have) kindly share it with your friends and loved ones to learn too. Thank you in advance! 1 Like
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Re: All You Need To Know About The Cbn’s Latest MPR And How It Affects The Economy by Hhansome(m): 3:04pm On Jun 28 |
And I am planning on taking a loan? |
Re: All You Need To Know About The Cbn’s Latest MPR And How It Affects The Economy by WhizdomXX(m): 11:08pm On Jun 28 |
Rosabonnigeria:Good evening. Please I need clarifications about the classes of signatory to a joint account; Class A, Class B and Class C. WHat they can and cannot do, thank you. |
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