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Nairaland Forum / Nairaland / General / Business / CBN Raises Interest Rate To 14% (19044 Views)
CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels / CBN Raises Interest Rate To 18.75% / CBN Raises Interest Rate To 15.5% To Curb Rising Inflation (2) (3) (4)
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Re: CBN Raises Interest Rate To 14% by Elliotwaveforec: 10:48pm On Jul 19, 2022 |
just2endowed:This CBN is just there to make the rich richer and the poor poorer; and also to boost the profits of banks. Banks would simply lodge their monies with the CBN and earn interest without lifting a finger; the same applies to politicians who've stolen money in billions to invest in gilt-edged securities and go to sleep instead of using the same money to set up an industry and employ people. If youre justifying the hike to attract foreign investments, the money foreigners are bringing are only invested in the financial sector not real sector, for speculative purposes; so, it adds nothing to the economy. 1 Like |
Re: CBN Raises Interest Rate To 14% by Vanzcharles(m): 11:13pm On Jul 19, 2022 |
Elliotwaveforec: Bro so many things causes inflation, should I school you on this now? But that would be unnecessary, I would prefer schooling you on interest rate importance in the economy. Interest rate ❗❗ Interest rates are the most important tool central banks have and they are used to in fluency lending and savings and borrowing or consumption. Ahigher interest rate incentivizes investment and saving,since people will get more interest on their deposits and receive more in interest payments when borrowing to others. However,a lower rate of interest incentivizes borrowing and consumption,since it is cheaper to borrow money for that new car or house someone has always wanted. ❗❗The rate of interest also affects the flow of money across borders. For example,suppose interest rates in the UK are 2 percentages while in Germany they are 5 percent.People with savings in the bank would move their money into German banks to get a higher rate of interest,in effect,selling their pounds and buying euros.Therefore,changes in the interest rate are high impact events for exchange rates.❗❗ Also,monetary policy announcements are made regularly by the major central banks and if you think the interest rate will be low or higher than expected,the you can trade that currency and take advantage of the play Volatility following these announcements. You can still use "google" to get more information if you are still ignorant about it. |
Re: CBN Raises Interest Rate To 14% by luvly4luv(m): 11:58pm On Jul 19, 2022 |
JoshTim: You are not totally correct. What we are experiencing in Nigeria now is a cost push inflation, meaning that prices of things have gone up high, not because of too much money in circulation, but due to that production cost, energy cost, cost of food items and transportation has gone up. CBN is still not getting it right by increasing interest rate. What this country need now is to revamp the production/ industrial sector, fix power( electricity), fix the road infrastructure and improve railway transportation, boost agriculture. If we fail to thread in these directions, forget whatever measures and policies introduced by CBN. Those policies can be effective if we have demand push inflation. 4 Likes |
Re: CBN Raises Interest Rate To 14% by matify83: 12:02am On Jul 20, 2022 |
Quantitative tightening. This move may hurt the economy further as our inflation has hydra headed variables. Higher interest rates should mop up the excess liquidity in the system which ordinarily cools the economy after the massive naira printing ( quantitative easing) of 2021 and stems further spikes of inflationary trend. However, our system always seem to defy every economic theory. |
Re: CBN Raises Interest Rate To 14% by matify83: 12:13am On Jul 20, 2022 |
luvly4luv: The hike in interest rate will negatively affect the borrowing rate at which the productive sector access liquidity, invariably increasing production cost. It's a vicious cycle and I don't envy the seat of the CBN governor in this trying times where most nations are trending far below their projected growth forecast. |
Re: CBN Raises Interest Rate To 14% by Nobody: 12:14am On Jul 20, 2022 |
Kosoco:Even my Manhood and my Girlfriend's Kpekus has increased both in size and depth ![]() ![]() ![]() 2 Likes
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Re: CBN Raises Interest Rate To 14% by JAkpayen(m): 12:42am On Jul 20, 2022 |
Elliotwaveforec: That's the truth, FX rate is the cause of Nigeria's inflation. An average Nigerian now is even complaining of lack of money sef. Cluessless CBN!!! olaztek: I agree with you, we need a special study by team of economists for Nigeria's economy and not this textbook application which the economy has completely defy. 2 Likes |
Re: CBN Raises Interest Rate To 14% by InvertedHammer: 1:09am On Jul 20, 2022 |
/ How does raising interest rate in Nigeria fight inflation? They are using Oyibo textbook format to fight inflation in a voodoo economy. Can anyone accurately tell the Consumer Price index in Nigeria? What is the Money supply? Can interest rate reduce high cost of doing business in Nigeria which is transferred to customers? Bad roads, no electricity, high cost of diesel, overtaxation by Federal and local government agencies, etc have nothing to do with interest rate. When we talk of agriculture, they have government agents (aka Boko Haram) disrupting farmers' activities. So what has that got to do with interest rate? / 2 Likes |
Re: CBN Raises Interest Rate To 14% by Poanan: 1:10am On Jul 20, 2022 |
Sonoyom: Obviously u dont understand economics. Let the rate reflect the reality |
Re: CBN Raises Interest Rate To 14% by mamaafrik(m): 2:23am On Jul 20, 2022 |
lonecatt:we could setup an upward review of tax exemption ,holiday, subsidy and many cushions. |
Re: CBN Raises Interest Rate To 14% by VeeVeeMyLuv(m): 2:58am On Jul 20, 2022 |
Cognitivereason:Yes in a "normal" country! But mehn Naija case is remarkably damn different! If there's plenty money in circulation that calls for rate hike as an interventionary measure to stem the inflationary tide why then are majority of the citizinery complaining of severe hardship arising from a lack of money? I think this inflation is fueled by devaluation of the local currency, lack of sincerity of purpose and lack of transparency of the government, corruption in high & low places, govt backed insecurity. |
Re: CBN Raises Interest Rate To 14% by showafrica(m): 3:45am On Jul 20, 2022 |
LongwayGone2021: Until they rig Obi out, Sri Lanka will be child's play. The only hope every Nigerian youth has now is Obi. If not for Obi suicide and rituals for be order of the day |
Re: CBN Raises Interest Rate To 14% by showafrica(m): 3:48am On Jul 20, 2022 |
Sleyanya1: The only hope remaining now is Obi but six months still far sha 1 Like |
Re: CBN Raises Interest Rate To 14% by RayRay06677(m): 3:57am On Jul 20, 2022 |
Bad for borrowers and good for investors. Start investing today to avoid premium tears each time govt farts. Better days ahead |
Re: CBN Raises Interest Rate To 14% by franugo(m): 4:24am On Jul 20, 2022 |
A305: That's also another likely effect, but yea, banks will raise interest rate for sure. |
Re: CBN Raises Interest Rate To 14% by lonecatt(m): 4:54am On Jul 20, 2022 |
mamaafrik:now you come , this is the kind of discussion i expected from the guy. he was more like saying we should give the government a clap for good job done |
Re: CBN Raises Interest Rate To 14% by MarxisGLABACK: 5:16am On Jul 20, 2022 |
C.B.N.Governor recently lost his 100million , So him wan collect am back, times 3 |
Re: CBN Raises Interest Rate To 14% by JoshTim: 5:45am On Jul 20, 2022 |
luvly4luv: You aren't totally correct either. If i was to elaborate on that, i would have added other sources of inflation. What Nigeria experiences is beyond cost-push alone. When you aggregate the inflation factors, you will see imported inflation and so on. The 2020 pandemic season wasnt peculiar to Nigeria alone, it's a global disaster, so there are things a country can easily control and there are things it cannot control. Another is the 2008 global economic meltdown. Countries will have to respond to these global incidences by developing a good shocker absolver and this is done through massive addition to GDP. This is what Nigeria lacks and so cannot cussion the effects of imported inflation. From time to time, central banks will have to mop up excess liquidity by contracting the economy when too much money is in circulation. So, it is wrong for to say is is cost push when majority of what we consume is imported. So, the major contributor to inflation in Nigeria in the last 10 years or thereabout is imported inflation. Cosh push and demand pull have their own part too. |
Re: CBN Raises Interest Rate To 14% by princeade86(m): 5:53am On Jul 20, 2022 |
Kosoco:not everything sir because salary remain the same. |
Re: CBN Raises Interest Rate To 14% by slydog(m): 6:00am On Jul 20, 2022 |
AKWATGOLD1: He is right. It's basic economics In Canada the central bank increased it by 0.25% last month, this month it was increased by 1% There is a global inflation which is attributed to supply disruption of various commodities as a result of the Russian Ukraine War. |
Re: CBN Raises Interest Rate To 14% by brightalo1010: 6:01am On Jul 20, 2022 |
iwaeda:I'm not supporting Apc but take a look at other countries like Ghana interest rate, inflation debt to gdp e.t.c they've even gone to IMF for bail out. Whoever that is coming to rule Nigeria will still borrow, inflation will increase, debt to gdp will increase nothing is ever going to remain the same even exchange rate, the person will blame previous government forever, there'll be an out cry, many that supported him today will come and regret. Nigeria probably need a review of the system unless that what written against this government will continue against whoever that is going to rule next. This I bet you. Remember this in few years to come. |
Re: CBN Raises Interest Rate To 14% by Sonoyom(m): 6:45am On Jul 20, 2022 |
Poanan: You have zero knowledge, so shut up. Between May and July we have had 3 different interest rate, how would the lenders keep up? Too many ignorant folks on the internet. |
Re: CBN Raises Interest Rate To 14% by AKWATGOLD1(m): 6:49am On Jul 20, 2022 |
All these basic economics is applied in a standard economy but in Nigeria the reverse is the case. What Nigeria government can do is to improve basic necessity like security, electricity etc. It will reduce the so called inflation. (quote author=slydog post=114903436] He is right. It's basic economics In Canada the central bank increased it by 0.25% last month, this month it was increased by 1% There is a global inflation which is attributed to supply disruption of various commodities as a result of the Russian Ukraine War.[/quote] |
Re: CBN Raises Interest Rate To 14% by izuugodwin(m): 7:09am On Jul 20, 2022 |
Skyfornia:na so we se am bad govment |
Re: CBN Raises Interest Rate To 14% by Elliotwaveforec: 7:37am On Jul 20, 2022 |
Vanzcharles:I'm a fundamental analyst, I know all these; I asked you a straight question what causes inflation in Nigeria at present, you're quoting textbook. Since you're beating about the bush without giving me the simple answer, let me help you. High Exchange rate I e Naira depreciation is the number one cause of inflation in our country not too much money in circulation. The CBN thinks iour nflation is caused by excess money hence the hike in rates. |
Re: CBN Raises Interest Rate To 14% by Elliotwaveforec: 7:58am On Jul 20, 2022 |
showafrica:Stingy Obi that's pro-tightening? We need massive easing (Tinubunomics). |
Re: CBN Raises Interest Rate To 14% by alwayspositive8: 7:59am On Jul 20, 2022 |
You are right with yoour definition. But the fact remains that is there really an excess money in circulation. I think what emefiele needs to focus on is the other side of inflation " few goods". His policy should increase production and not stiffens in. Cognitivereason: |
Re: CBN Raises Interest Rate To 14% by alwayspositive8: 8:00am On Jul 20, 2022 |
On savings will definitely increase they will want youto save more than spend just2endowed: |
Re: CBN Raises Interest Rate To 14% by MedicH: 8:07am On Jul 20, 2022 |
Cognitivereason: You are very funny. A poor rat is justifying his oppressors for imposing harsh economic realities upon him. Your focus is on contractionary fiscal policies, the one govt chose to cushion inflation which only affects you and not the one that affects government. If there are few goods to purchase, why is government not chasing services to create discretionary sending. Why is government creating more services due to stuffs like road constructions, equipping schools, hospitals and stuffs to put services on ground which will extract the money in circulation but na the one that affects u they go like. ode |
Re: CBN Raises Interest Rate To 14% by Nobody: 8:17am On Jul 20, 2022 |
Cognitivereason: This is text book definition and this seems not to apply much when the country has been busy printing helicopter money. When you print helicopter money not back by the dollar and means of production, there will also be trouble as the later end product which is to encourage savings will fail. CBN is simply in a fix. Okay okay where is the money in circulation? Both public and private sector cannot pay wages and accruals. The manufacturing sector is in serious crisis and you are talking about excess money in circulation. Borrowers can’t pay back their loans. So where is the excess money to mop up? Let’s agree on that first. Then you can proceed to educate my ignorance base on present realities and not text book elucidations. 1 Like |
Re: CBN Raises Interest Rate To 14% by Oyiboman69: 8:39am On Jul 20, 2022 |
Cognitivereason:In your learned opinion... is this the only cause of inflation?.cos it seems you're far from reality.... |
Re: CBN Raises Interest Rate To 14% by Oyiboman69: 8:42am On Jul 20, 2022 |
Cognitivereason:you're the person who's not in terms with reality |
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