Chukzyfcb:

when I read at comments like this one nairaland, I baffle at the level of reasoning. so so irrational and myopic. I can't believe you even gathered likes for this low level thought.
yes USA and England's interest rate is between 0.25% and 0.5% but do you know their inflation rate?
don't you know that inflation rate and interbank rate move hand in hand.
at USA the inflation rate currently stands at 1.1% while at england is at 0.3%. now compare it to Nigeria
where inflation rate is at 17.5% meanwhile MPR rate is at 14%, which country is lagging behind? which country is more generous in its rates if not Nigeria. you were so quick to dish out the inter bank rates without checking the inflation rate yet you feel you have made an important comment.
how will investors invest in the money market, when your interest rate is at miserly 14% meanwhile inflation is 17.5%, how will the banks keep up? or don't you know that they will be losing money by over 3%
emefiele is right, in the actual sense if he wants to chase inflation he should even increase the rates to meet up with the rising inflation but then what we have is stagflation which is were adeosun comes in, he can't be chasing inflation when nothing is done to stimulate growth in the country.
adeosun like obiano has done should give tax incentives and lower tax rates for certain commodities, that way inflation will be lowered thus reducing the MPR rate overtime.
don't mention USA or england here again, when Nigeria is even doing us a favour by having a Net interest rate of -3%. Rubbish

helovesme:


One billion likes!!!

Check my previous posts!! That CBN governor, Emefiele is the worst CBN governor ever !!! The dude just has to go.

Cutting down interest rates is a key policy used in situmating growth in any economy undergoing tough economic times (recession).

Bank of England recently reduced its interest rates to 0.25% from 0.5% after the brexit vote!! This is the country's lowest interest rate ever on record. Do you know the great impact that had on the economy? The positive ripple effect is felt in all sections of the economy. Mortage rates reduced for those on variable rates which meant people had more disposable income. Lower interest rates also benefits businesses. I can go on and on.

Honestly, Emefiele has to go. Why Buhari hasn't fired him is just want I do not understand.

Chukzyfcb:

when I read at comments like this one nairaland, I baffle at the level of reasoning. so so irrational and myopic. I can't believe you even gathered likes for this low level thought.
yes USA and England's interest rate is between 0.25% and 0.5% but do you know their inflation rate?
don't you know that inflation rate and interbank rate move hand in hand.
at USA the inflation rate currently stands at 1.1% while at england is at 0.3%. now compare it to Nigeria
where inflation rate is at 17.5% meanwhile MPR rate is at 14%, which country is lagging behind? which country is more generous in its rates if not Nigeria. you were so quick to dish out the inter bank rates without checking the inflation rate yet you feel you have made an important comment.
how will investors invest in the money market, when your interest rate is at miserly 14% meanwhile inflation is 17.5%, how will the banks keep up? or don't you know that they will be losing money by over 3%
emefiele is right, in the actual sense if he wants to chase inflation he should even increase the rates to meet up with the rising inflation but then what we have is stagflation which is were adeosun comes in, he can't be chasing inflation when nothing is done to stimulate growth in the country.
adeosun like obiano has done should give tax incentives and lower tax rates for certain commodities, that way inflation will be lowered thus reducing the MPR rate overtime.
don't mention USA or england here again, when Nigeria is even doing us a favour by having a Net interest rate of -3%. Rubbish

drss2:
command n control is d only economic policy of buari dullard. whether his actions is economically bad for d con3 is not his business. buari dullard is a feudalist communist disciple.

Xapio:
thank you for schooling these APC's sycophants on NL here.. Emefiele explained why CBN should not lower interest rate and suggests what should be done first, that is giving tax incentives to low income earners and tax the high income earners more, that way, there will be balance and stability in the system... But they are not seeing that rather, they spew their tribally induced hogwash here

helovesme:


your long rant only shows how poorly educated/informed/experienced/exposed you are.

its a pity you do not understand the effect/correlation on lowered interest rate and inflation.

since you have chosen to throw insults as part of your arguments on an interesting topic, you are best ignored. when you learn how to argue intelligently without recourse to insults, then you can quote my posts and then i will school/educate you properly.

gboye1999:


Not true.
The natural thing to do in this scenario would be to reduce rates, and the ratio however if the regulator observes that conssistently the financial institutions prefer to deploy the attendant liquidity to enhance short term gains to themselves in forex deals rather than agriculture and real sector then it seems the regulator is also handicapped in terms of pushing its objectives through. In order words, it's really not in control of the way the banks handle business.

OlujobaSamuel:
the banks wont operate at a loss, the cbn rate is just a benchmark, investors will get credit facility at lower rates compared to this 22% upwards banks are charging, in nigeria, you pay close to 500k on every 1m you get from tha bank, how many business can afford that if not the big goons, lets copy swiss model, where we have high interest on savings compared to cost of credits, but our cbn wont love that line pf thought, our banking system isnt about us but enriching the few.

Chukzyfcb:

its also a pity you don't understand the relationship between inflation rates and inter bank rates?
i don't know what is wrong with you people, didn't you read where emefiele said he once reduced rate and nothing happened? do you think you are more brilliant than he is or you are suggesting something new?
if you cannot understand that emefiele is doing you a favour by retaining the rate thus having a negative net interest of 3% then I am sorry to say you don't even understand the topic at all. you stylishly want to run away from further discussion because I have opened the flaws in your comment.
Is monetary policy the only key driver to the economy , what about the fiscal policy. how does adeosun intend to help the economy. how?
because you and I know that they key reason inflation is high today isn't truly because of the interest rates but simply lies a lot on the forex.
once forex floods into the market, cost of items will reduce.
like I said: interest rate was once reduced, yet inflation rose. but then I don't expect you to know that because you neither trade in the money market nor follow the trend, you just jump on the bandwagon to abuse this govt.

AZeD1:

Actually, you are the one that is wrong. There's no way the economy can move forward at 22% interest rate.
What the CBN governor should do is reduce interest rate, coarse the government into allowing banks that lend to the real sector have access to funds in the TSA.
The poorest of the poor(hawkers and market women) in this country don't pay tax so how does reducing tax help them?
Most states have not paid salary so even if you reduce tax, it doesn't help people who will not see the money.


We need to generate jobs and improve the manufacturing sector, we can deal with inflation later.

blueto:
Buhari is indeed a socialist. How can you compel the banks to reduce interest rate and suffer lost? This will no longer motivate banks to give interest rates, is like doing business that isn't lucrative, with time you abandon such business. I thank God that Emefiele and the 10 committee members stood their grounds and declined such irrational directives from the “poorly qualified” finance minister.

blueto:
Buhari is indeed a socialist. How can you compel the banks to reduce interest rate and suffer lost? This will no longer motivate banks to give interest rates, is like doing business that isn't lucrative, with time you abandon such business. I thank God that Emefiele and the 10 committee members stood their grounds and declined such irrational directives from the “poorly qualified” finance minister.

AZeD1:

Actually, you are the one that is wrong. There's no way the economy can move forward at 22% interest rate.
What the CBN governor should do is reduce interest rate, coarse the government into allowing banks that lend to the real sector have access to funds in the TSA.
The poorest of the poor(hawkers and market women) in this country don't pay tax so how does reducing tax help them?
Most states have not paid salary so even if you reduce tax, it doesn't help people who will not see the money.


We need to generate jobs and improve the manufacturing sector, we can deal with inflation later.

OlujobaSamuel:
the banks wont operate at a loss, the cbn rate is just a benchmark, investors will get credit facility at lower rates compared to this 22% upwards banks are charging, in nigeria, you pay close to 500k on every 1m you get from tha bank, how many business can afford that if not the big goons, lets copy swiss model, where we have high interest on savings compared to cost of credits, but our cbn wont love that line pf thought, our banking system isnt about us but enriching the few.

entrepreneurmic:
NO WONDER MORE PEOPLE ARE CHOOSING MMM WITH 30% INTEREST MONTHLY SINCE D BANKS ARE PAYING PEANUT AS INTEREST TO YOUR SAVINGS.

Chukzyfcb:

inter bank rate is 14% not 22% to start with.
loan rates at bank is about 27-29% so I don't know where you conjured up 22%.
secondly CBN governor cannot coerce the bank, the bank will only lend to those they feel are credit worthy or have tangible collaterals, why? their non performing loans are steady rising
thirdly you don't know how tax incentives help the poor?
the commodities that the poor purchases will reduced if the manufacturer will produce it at a cheaper price
the road side sellers will be freed from those small small payments they do in the market, etc
fourth, talking about salary is where CBN has urged the f.g and state govts to improve in.
since July MPR was raised to 14%, 1billion dollars was realised through foreign inflows. reducing it now will chase away those inflows; what CBN has been struggling to get since
what we need most importantly is HUGE FOREX INFLOW.
reduced interest rate has been tried before with nothing to show for it, its nothing new under the sun. we need fiscal policy, trade policy, and other sectors to come together. you cannot clap with one hand bro!

Chukzyfcb:

inter bank rate is 14% not 22% to start with.
loan rates at bank is about 27-29% so I don't know where you conjured up 22%.
secondly CBN governor cannot coerce the bank, the bank will only lend to those they feel are credit worthy or have tangible collaterals, why? their non performing loans are steady rising
thirdly you don't know how tax incentives help the poor?
the commodities that the poor purchases will reduced if the manufacturer will produce it at a cheaper price
the road side sellers will be freed from those small small payments they do in the market, etc
fourth, talking about salary is where CBN has urged the f.g and state govts to improve in.
since July MPR was raised to 14%, 1billion dollars was realised through foreign inflows. reducing it now will chase away those inflows; what CBN has been struggling to get since
what we need most importantly is HUGE FOREX INFLOW.
reduced interest rate has been tried before with nothing to show for it, its nothing new under the sun. we need fiscal policy, trade policy, and other sectors to come together. you cannot clap with one hand bro!

Nalikedis:
Manufacturer will produce at cheaper rate, when bank loan already mae it difficult for them to compete?

blueto:
Buhari is indeed a socialist. How can you compel the banks to reduce interest rate and suffer lost? This will no longer motivate banks to give interest rates, is like doing business that isn't lucrative, with time you abandon such business. I thank God that Emefiele and the 10 committee members stood their grounds and declined such irrational directives from the “poorly qualified” finance minister.

Chukzyfcb:

reduce the rates and have more people access the naira right and what happens? inflation reduces? lool
have you forgotten inflation means too much money chasing few goods, inflation cannot reduced if other factors aren't considered
we need
- huge forex inflows in the country
- the transportation fare needs to be reviewe
- the electricity tarrif is high with no significant improvement
- tax incentives should be given to key manufacturing item
these four things are to be checked, reducing MPR rates while these factors aren't touched will do nothing but further increase inflation.
all hands need be on deck. emefiele cannot do it alone

AZeD1:

Actually the CBN can coerce the banks given guarantees.
There's a CBN agricultural product loan which is 8%, this can be extended to manufacturers too.

Speaking of manufacturers, one of their biggest complains is the high interest rate.

http://independentnig.com/manufacturers-decry-high-interest-rates/#

Remember the country also suffers from a high unemployment rate and the best way to take care of that is by encouraging people to start small businesses.

It's a case of being between the devil and the deep blue sea and in my opinion, the best way is to reduce interest rate.

Chukzyfcb:

reduce the rates and have more people access the naira right and what happens? inflation reduces? lool
have you forgotten inflation means too much money chasing few goods, inflation cannot reduced if other factors aren't considered
we need
- huge forex inflows in the country
- the transportation fare needs to be reviewed
- the electricity tarrif is high with no significant improvement
- tax incentives should be given to key manufacturing item
these four things are to be checked, reducing MPR rates while these factors aren't touched will do nothing but further increase inflation.
all hands need be on deck. emefiele cannot do it alone

blueto:
Buhari is indeed a socialist. How can you compel the banks to reduce interest rate and suffer lost? This will no longer motivate banks to give interest rates, is like doing business that isn't lucrative, with time you abandon such business. I thank God that Emefiele and the 10 committee members stood their grounds and declined such irrational directives from the “poorly qualified” finance minister.

Nalikedis:
Huge forex inflow from where or to do what? okay to buy products from company that are bankrupt as a result of high interest bank loans... Transportation fare needed to be reviewed...by who? Buhari? when transporter borrowed at lending rate of 30+% from GT na Buhari go help him pay back nah. Electricity tarriffs are high...sure, because power companies needed to raise fund to invest into infracstructure, and since they are scared to approach the banks because of high lending rates somebody must pay nah... Tax incentives to manufacturers? Like they pay any tax before...Guy... No body run manufacturing on a high lending rate in a market? economy like ours and stay afloat for long. You can say anything or provide any data to win argument... YOU won! fine...but let common sense prevail. US, Japan and China cant set her rate at below 5% and us have ours above 20% and expect a better result. No tax incentive will bring back Dunlop that left our shore in 2012 at the height of oil boom. Since our lending rate has been left this high, most of indigenous manufacturing coy has gone under.

mrdan:


Banks interest rates are set by the Central Bank, if the central bank lows interest rates, the banks have no choice but to follow.

Both the Finance minister and the CBN are correct on their standing. The finance minister choose to reduce interest rate to stimulate the economy so that people can borrow more money.
"
In general, as interest rates are lowered, more people are able to borrow more money. The result is that consumers have more
money to spend, causing the economy to grow and inflation to increase. The opposite holds true for rising interest rates. As interest
rates are increased, consumers tend to save as returns are higher. With less disposal income to spend as a result of the increase in
savings, the economy slows and inflation decreases.

The central bank will raise interest rates to reduce inflation. Conversely, the central will ease (or decrease) rates to spur economic
growth.

http://www.investopedia.com/ask/answers/12/inflation-interest-rate-relationship.asp?
ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186

http://www.investopedia.com/university/inflation/inflation3.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
"

The CBN also choose to retain or increase the interest rate to invite foreign investments.

Lakeland4321:
please give the forum and the general public genuine information,the 22% you mentioned would mean that for every N1m you would pay about 220k and not 500k. Even if you add other charges it will not exceed 250k for a period of 12 months. Though I believe our interest rates are ridiculously high they are not what you portrayed.

AZeD1:

Actually, you are the one that is wrong. There's no way the economy can move forward at 22% interest rate.
What the CBN governor should do is reduce interest rate, coarse the government into allowing banks that lend to the real sector have access to funds in the TSA.
The poorest of the poor(hawkers and market women) in this country don't pay tax so how does reducing tax help them?
Most states have not paid salary so even if you reduce tax, it doesn't help people who will not see the money.


We need to generate jobs and improve the manufacturing sector, we can deal with inflation later.

mrdan:


Banks interest rates are set by the Central Bank, if the central bank lows interest rates, the banks have no choice but to follow.

Both the Finance minister and the CBN are correct on their standing. The finance minister choose to reduce interest rate to stimulate the economy so that people can borrow more money.
"
In general, as interest rates are lowered, more people are able to borrow more money. The result is that consumers have more
money to spend, causing the economy to grow and inflation to increase. The opposite holds true for rising interest rates. As interest
rates are increased, consumers tend to save as returns are higher. With less disposal income to spend as a result of the increase in
savings, the economy slows and inflation decreases.

The central bank will raise interest rates to reduce inflation. Conversely, the central will ease (or decrease) rates to spur economic
growth.

http://www.investopedia.com/ask/answers/12/inflation-interest-rate-relationship.asp?
ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186

http://www.investopedia.com/university/inflation/inflation3.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
"

The CBN also choose to retain or increase the interest rate to invite foreign investments.

Also from the reason given by the CBN to retain current rate:

Emefiele said, “The second part of it is that when you lower the interest rate, it will make it possible for the fiscal authorities to borrow at lower rates.

“But we are saying fine. If you borrow at lower rates to stimulate spending, what that does is that it simulate demand for goods, but when you stimulate demand for goods by providing cash or money to be spent without taking action to boost industrial capacity, manufacturing capacity and output, what happens is that you will see a situation where too much money will be chasing too few goods, which will worsen the inflationary conditions that we have now.

“And that is why we are saying that the option that we would like to adopt is while the fiscal authority is going ahead to spend, what we want to do is to retain the rates where they are so that that will again encourage the inflow of capital, because between July and now, we have seen the inflow of above $1bn.”

Now the onus is on CBN to set about on how to sanction Banks for not borrowing to the manufacturing and agricultural sector but the trading sector, because the bank is refusing to follow guidelines laid down by the CBN.

Chukzyfcb:

yes it should reduce. the interest rate was increased by just 2%, so if I used to take loans from banks at say 25% now it means bank will charge me 27%.
so if I am given a tax incentive, let's say I used to pay a tax of 10% on any imported raw materials, let's say I was given tax free import. it means I'll will say 10% of the actual cost of my business.
can't you see that the impact ought to be felt in the price of commodities. but the cost of production is high in Nigeria not only because of high interest rate, other factors too I mentioned above

jpphilips:


Where did you get that 22% from?