With CBNs official devaluation of the naira by about 6% what it means is that the naira in your hand is immediately worth 6% less. It means that the value of your annual income or monthly salary is 6% less. That is so because we have an exocentric economy that depends entirely on the value of the dollar Now, to CBNs latest monetary regime. It is no longer news that the Monetary Policy Rate is up by 100basis points. That instantly increases the already prohibitive lending rates. The already limited access to finance will be further impaired. Businesses will groan under the despotic reign of deposit money banks. The Cash Reserve Ratio for private sector deposits was increased by 300basis points. That implies an immediate restriction on the lending discretion of financial institutions. In a nut shell, businesses will be forced to cut costs next year to stay afloat as they would have access to lesser trading credits. It will force some companies to reduce staff number, it would cause others to lay off. LONG STORY SHORT... PREPARE AHEAD. IT WILL HAVE TO BE A PRUDENT 2015.... Unfortunately,.our leaders have foisted needless austerity on us by the irresponsible decisions of the past. It!s also unlikely that they themselves will live a prudent life in that year and nothing also suggests that anything is being done to avoid this kind of scenario in the coming years
Posted on: Fri, 28 Nov 2014 10:02:21 +0000