CBN Raises Benchmark MPR By 200 Basis Points To 24.75% - Business (2)

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CBN Raises Benchmark MPR By 200 Basis Points To 24.75% - Business (2) - Nairaland

Nairaland Forum / Nairaland / General / Business / CBN Raises Benchmark MPR By 200 Basis Points To 24.75% (11661 Views)

CBN Raises Interest Rate To 26.25 % Amid Soaring Inflation Levels / CBN Raises Interest Rate To 18.75% / CBN Raises MPR To 13% From 11.5% (2) (3) (4)

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Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by SmartyPants(m): 2:49pm On Mar 26

MrPristine:
These clowns have clearly lost the plot, this is a time that they should be working to reduce interest rates and encouraging more people to go into productive businesses to help grow the economy. Instead the clueless charlatans are doing the exact opposite.

You have no clue. Inflation is sky high and you are talking about flooding the economy with money to promote new businesses. Secondly, this is being done to further stabilize the naira by attracting fresh portfolio investment. Do you understand all this?

6 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Ogene001: 2:50pm On Mar 26

Winning123:

Olodo! Pump dollars from foreign reserves, the reserves you kept I guess. The reserves that can only support a month import. How did we get to this level in Nigeria with young people who can think in spite of huge money spent in educating them.

You didn't understand the comment you quoted

7 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Putindbutt: 2:50pm On Mar 26

OboOlora:

Trial and error financial techniques.
Pump $$$ from foreign reserves to save a dying naira so people can applaud you for a week.
Then watch the same $$$ rise in the next month and blame citizens for not buying unavailable local goods.

illiterate.

5 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by jmoore(m): 2:51pm On Mar 26

grandstar:

You wrote nothing

Check it again.

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Putindbutt: 2:52pm On Mar 26

MrPristine:
These clowns have clearly lost the plot, this is a time that they should be working to reduce interest rates and encouraging more people to go into productive businesses to help grow the economy. Instead the clueless charlatans are doing the exact opposite.

Another dummy, so many dummy on this forum.

7 Likes 1 Share

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Ikaeniyan0: 2:54pm On Mar 26

MrPristine:
These clowns have clearly lost the plot, this is a time that they should be working to reduce interest rates and encouraging more people to go into productive businesses to help grow the economy. Instead the clueless charlatans are doing the exact opposite.

They should reduce interest rate when the reason they increase it few days ago has not been achieve?

2 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by softtorce: 2:54pm On Mar 26

Exactly, while you continue with your commenting out of foolishness policy on NL.

OboOlora:

Trial and error financial techniques.
Pump $$$ from foreign reserves to save a dying naira so people can applaud you for a week.
Then watch the same $$$ rise in the next month and blame citizens for not buying unavailable local goods.

2 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Putindbutt: 2:54pm On Mar 26

SmartyPants:

You have no clue. Inflation is sky high and you are talking about folding the economy with money to promote new businesses. Secondly, this is being done to further stabilize the naira by attracting fresh portfolio investment. Do you understand all this?

You have the time to explain to dummies, they are ignorant, unteachable and closed minded.

7 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by CodeTemplar: 3:00pm On Mar 26

sameoldguy:
Dollar/Naira is going down, but prices still remains high in Nigeria.

goods were produced when dollar rate was high so expect prices to crash very slowly.

4 Likes 1 Share

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by jmoore(m): 3:01pm On Mar 26

Ikaeniyan0:
They should reduce interest rate when the reason they increase it few days ago has not been achieve?

If business A borrows money at 24.75 % and business B borrows money at 15%. With all other factors being equal, which should have a higher selling price?

Is a higher selling price not inflation?

6 Likes 1 Share

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by EconomistXplain: 3:02pm On Mar 26

iichidodo:
This helps to squeeze out and mop up any loose naira lying about in the economy for speculators to gamble on dollars.I hope this increases the momentum of the current crash of dollar from now to the nearest future and we don't have to beg France to use CFA anymore.

Pos charges will rise

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Emmastan291: 3:02pm On Mar 26

Somebody should help me explain this in football terms

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Inspirer1: 3:05pm On Mar 26

grandstar:

It will soak money from the system which will mean less money to buy goods and also forex, which will then reduce inflation and make the Naira appreciate.

I feel the mpr should be around 28% at the very least.

All the same, kudos to Cardoso.

Okay, thank you.

We hope and pray for the best to happen to our country.

2 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Elliotwaveforec: 3:08pm On Mar 26

It's still low compared with inflation rate! Inflation is currently 28% and interest should be above that; we are still operating negative interest rate (real).

For me to buy government bonds, interest rate on the bonds must be higher than inflation rate for me to make profit.

CBN is on the right path with the increase, but not enough, it needs to be raised higher as inflation rate rises.

Good job CBN!

12 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by kpompey: 3:08pm On Mar 26

Government should start price control now that naira is gaining. USD is coming down, but rice price remains unchanged. Dangote still sells cement at 9800, building block still sell above 650. The way EFCC attack the aboki's operating the bureau business, the same way those dubious igbo traders should be pounce on. They increased price of existing stocks bought at a very low rate to current price fixed by manufacturers because of surge in dollars.Now manufacturers are reducing the prices, they are claiming old stock must be cleared at old rate.This is not business but fraud. If USD falls and Nigerians failed to enjoy the dividend, then government has achieved nothing. Government should look inward and set price regulatory bodies to checkmate this rogues calling themselves bizmen.

11 Likes 1 Share

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Tareq1105: 3:10pm On Mar 26

OboOlora:

Trial and error financial techniques.
Pump $$$ from foreign reserves to save a dying naira so people can applaud you for a week.
Then watch the same $$$ rise in the next month and blame citizens for not buying unavailable local goods.

Nigeria will be fine in the watchful presence of Tinubu APC presidency to the glory of God whether you wish Nigeria well or not.

6 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by ceejayluv(m): 3:10pm On Mar 26

grandstar:
Good.

The rates still need to go higher. I feel 28-30% will be ideal to bring inflation down. It's necessary they set an inflation target below 10% and achieve it.

Pretty optimistic. When was the last time we had a single digit CPI in Nigeria?

1 Like

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Geovanni412(m): 3:14pm On Mar 26

Inspirer1:
Implications?

Increasing the monetary policy rate (MPR) by the Central Bank of Nigeria (CBN) has several implications for the economy:

1. **Tightening of Monetary Policy**: By raising the MPR, the CBN is essentially tightening its monetary policy. This means it is making it more expensive for banks to borrow money from the central bank. When borrowing becomes more expensive, banks are likely to lend less, which can reduce the amount of money circulating in the economy.

2. **Impact on Borrowing and Spending**: Higher interest rates typically discourage borrowing and spending by both consumers and businesses. Consumers may be less likely to take out loans for purchases such as homes or cars, while businesses may scale back on investments and expansion plans due to increased borrowing costs. This can lead to a decrease in economic activity and slower growth.

3. **Control of Inflation**: One of the primary reasons for raising the MPR is to control inflation. Inflation occurs when the prices of goods and services rise over time, eroding purchasing power. By increasing interest rates, the CBN aims to reduce consumer spending and investment, which can help curb inflationary pressures by slowing down demand in the economy.

4. **Exchange Rate Stability**: Higher interest rates can also influence the exchange rate. Increased interest rates may attract foreign investors seeking higher returns on their investments, leading to an influx of foreign capital into the country. This can strengthen the local currency and help stabilize the exchange rate.

5. **Potential Impact on Investment**: While higher interest rates can help control inflation, they may also have a dampening effect on investment and economic growth in the short term. Businesses may delay or cancel investment projects due to higher borrowing costs, which can negatively affect job creation and overall economic output.

Overall, the decision to raise the MPR indicates that the CBN is prioritizing inflation control and macroeconomic stability. However, the impact on the economy will depend on various factors, including the degree of the interest rate hike, the responsiveness of consumers and businesses to higher borrowing costs, and the effectiveness of other monetary and fiscal policies in supporting economic growth.

copied from chatgpt

9 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Inspirer1: 3:19pm On Mar 26

Geovanni412:

Increasing the monetary policy rate (MPR) by the Central Bank of Nigeria (CBN) has several implications for the economy:

1. **Tightening of Monetary Policy**: By raising the MPR, the CBN is essentially tightening its monetary policy. This means it is making it more expensive for banks to borrow money from the central bank. When borrowing becomes more expensive, banks are likely to lend less, which can reduce the amount of money circulating in the economy.

2. **Impact on Borrowing and Spending**: Higher interest rates typically discourage borrowing and spending by both consumers and businesses. Consumers may be less likely to take out loans for purchases such as homes or cars, while businesses may scale back on investments and expansion plans due to increased borrowing costs. This can lead to a decrease in economic activity and slower growth.

3. **Control of Inflation**: One of the primary reasons for raising the MPR is to control inflation. Inflation occurs when the prices of goods and services rise over time, eroding purchasing power. By increasing interest rates, the CBN aims to reduce consumer spending and investment, which can help curb inflationary pressures by slowing down demand in the economy.

4. **Exchange Rate Stability**: Higher interest rates can also influence the exchange rate. Increased interest rates may attract foreign investors seeking higher returns on their investments, leading to an influx of foreign capital into the country. This can strengthen the local currency and help stabilize the exchange rate.

5. **Potential Impact on Investment**: While higher interest rates can help control inflation, they may also have a dampening effect on investment and economic growth in the short term. Businesses may delay or cancel investment projects due to higher borrowing costs, which can negatively affect job creation and overall economic output.

Overall, the decision to raise the MPR indicates that the CBN is prioritizing inflation control and macroeconomic stability. However, the impact on the economy will depend on various factors, including the degree of the interest rate hike, the responsiveness of consumers and businesses to higher borrowing costs, and the effectiveness of other monetary and fiscal policies in supporting economic growth.

copied from chatgpt

thanks

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by porthouse7(f): 3:20pm On Mar 26

Amigoss:
Gbajue policies when inflation is still on the rise and people on the streets are screaming ebi'n pawa

ebina pa e

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by routed: 3:21pm On Mar 26

OboOlora:

Trial and error financial techniques.
Pump $$$ from foreign reserves to save a dying naira so people can applaud you for a week.
Then watch the same $$$ rise in the next month and blame citizens for not buying unavailable local goods.

What is MPR? Oya now! Tell us.
Please, let people who attend day school comment.

Yeye, pumping indeed! How old are you?

6 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Obierika(m): 3:23pm On Mar 26

adeabimbola700:
Economists in the house, please what does this mean to the Nigerian Economy?

200 basis points essentially means 2% and and increase means that that the federal government wants to reduce the level of liquidity in the economy

1 Like

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Freethinker87: 3:23pm On Mar 26

grandstar:

It will soak money from the system which will mean less money to buy goods and also forex, which will then reduce inflation and make the Naira appreciate.

I feel the mpr should be around 28% at the very least.

All the same, kudos to Cardoso.

Mr Economist.

While I understand the steps taken by the CBN to control inflation, I respectfully disagree with your perspective.

Increasing MPR to 25% means that banks will offer loans at over 32%. This new interest regime will be detrimental to businesses that rely heavily on loans for their operations.

With such high-interest rate, the cost of borrowing will go up, significantly reducing the overall liquidity available to businesses.

This will certainly lead to a slow-down in business operations, entrepreneurship, and consequently the economy like Chief Tinubu promised during the campaign. Nigeria does not have an excess liquidity problem, we're suffering from a FX scarcity.

It is highly unlikely that any legitimate business can survive, let alone thrive, under this condition. FGS businesses are struggling currently, with many multinationals shutting down operations in Nigeria. How much more SMEs?

Instead of mopping up money from the system, providing financial support and grants to businesses and entrepreneurs can stimulate the economy and eventually strengthen the Naira, but No! let's use our scarce FX to sponsor Hajj tourism to Mecca and import foreign SUVs for legislators while the illegitimate President and his wayward son travel in a 70-vehicle convoy.

4 Likes 2 Shares

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Blazetrailer: 3:29pm On Mar 26

...your post below has shown your ignorance . In a galloping inflationary situation, monetary policies that curb spending are the best remedies.

MrPristine:
These clowns have clearly lost the plot, this is a time that they should be working to reduce interest rates and encouraging more people to go into productive businesses to help grow the economy. Instead the clueless charlatans are doing the exact opposite.

6 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Annahh(f): 3:30pm On Mar 26

Freethinker87:
The CBN just raised interest rate, and surprisingly, people above me are applauding it. Nigerians are weird!

With the new lending rate set at 25%, banks will grant loans at 32%. It's inevitable that those with variable interest loan would experience an increase in their monthly payments.

This new rate doesnt only affect new loans, anyone with an existing loan should brace themselves for more expensive repayments.

Exactly.

2 Likes 1 Share

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by routed: 3:33pm On Mar 26

Inspirer1:
thanks

What I'm watching out for since July is for the inflation to slam the brake. Just a month stagnation. Then Cardoso will smile and I'll smile.
We are close .
Alita continua, Victoria acerta

2 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by frankson1(m): 3:36pm On Mar 26

OboOlora:

Trial and error financial techniques.
Pump $$$ from foreign reserves to save a dying naira so people can applaud you for a week.
Then watch the same $$$ rise in the next month and blame citizens for not buying unavailable local goods.

This is simple, what the FG is doing, is mopping up excess cash in the hands of people.

5 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Freethinker87: 3:40pm On Mar 26

Winning123:

Olodo! Pump dollars from foreign reserves, the reserves you kept I guess. The reserves that can only support a month import. How did we get to this level in Nigeria with young people who can think in spite of huge money spent in educating them.

You're actually the olodo here.

The FX currently in our foreign reserve, which our brilliant CBN Governor, who studied Business Admin due to his fear of mathematics, is using to defend the Naira was not earned through export or oil. It was a $3.3B loan from the AFDB.

We are indeed borrowing money to defend the Naira, a political victory we can only celebrate for a week. How long will it be before our reserve depletes and we're back to zero?

2 Likes 1 Share

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Ijaya123: 3:43pm On Mar 26

jmoore:

Na all these textbook economics go land Nigeria into more trouble.

How will interest rate make petrol to be sold at 195 naira?

Lack of power supply means that Nigeria depend on petrol and diesel to run their businesses. This is a major factor of production that is causing inflation.

Who promised you petrol at N195 per litre?

And can you name one county selling petrol at the equivalent of N195 per litre anywhere in the world?

3 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by frankson1(m): 3:43pm On Mar 26

MrPristine:
These clowns have clearly lost the plot, this is a time that they should be working to reduce interest rates and encouraging more people to go into productive businesses to help grow the economy. Instead the clueless charlatans are doing the exact opposite.

Obviously, you don't know ANYTHING about this and you think you know, the reason you made a very wayward comment with so much authority.

Just go ask a senior banker what this means and avoid asking obedients and haters.

2 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by Omoawoke(m): 3:43pm On Mar 26

jmoore:

It means interest rate has increased.
It will scare people from borrowing.
And those who borrow will have to increase their cost price which will increase the selling price, thereby making inflation higher.

What does government do when inflation is rising,? Cut interest rate or hike it?

You don’t know anything

The world powers have been hiking interest rates to combat inflation since 2022, they are watching to see if inflation is reducing so they can begin cutting interest rate. Interest rate hike is done to mitigate against inflation and mop out money from the system

5 Likes

Re: CBN Raises Benchmark MPR By 200 Basis Points To 24.75% by frankson1(m): 3:46pm On Mar 26

jmoore:

It means interest rate has increased.
It will scare people from borrowing.
And those who borrow will have to increase their cost price which will increase the selling price, thereby making inflation higher.

Ohhh gosh! 🤦🤦🤦

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