banks in Nigeria just wake up and introduced additional 5% interest on loans that is UBA that I had a facility from at 26%,who just informed me that my interest rate is now 31%. I even heard that other banks are higher,reason given was government( CBN) policy. well what ever policy it may be, it is anti people, anti progress, anti development. the economic situation of Nigerians is already hard, undermine the very few that may be comfortable. Lets face the fact Nigerians are not just living below a dollar per day, Nigerians are dying of hunger because all this will further increase prices of all goods and services . I even learnt from grape vine that Nigerian banks goes to Ghana to borrow at 17% to come back to lend to Nigerians at 31% interest rate,so rediculous

Pick any any economics textbook and read i.e
1. what is the effect when their is too much money in circulation
2.when too much money are pursuing few goods especially imported goods.
If you can find answer to the kwestions above then you will understand why the cbn did such thing. And the cbn are trying to avoid what destroyed economy of greece spain portugal et al and that is the major reason why england is a little bit expensive.

Redoil, are u a nigerian? if u are, do live hear in nigeria?
well if u mean inflation, a policy that increases hardship on the people, is that a very goog policy?

you may be one of those that makes this anti-people policy. if u actually had economic testbook, would you not have known that there are other ways like Treasury Bill,bonds and other (OMO) open market operation system that can be applied or used to mop up liquidity than a policy that inflict direct hardship on the people.

you are not the only economist in nigeria. even bankers that have one facility or the other with their banks are crying too.

May be you are still a student, your parents who pays the bill will soon complain to your ear even if they don't have choice.

I understand the hardship it wil cause. In Econmetrics there are certain things needed for such action to be taken. Let me quote another person from nairaland.

Elai147:

@ihedioramma, CRR is the amount of money that banks have to keep with CBN as cash. CBN has increased it from 12% to 50% because there is too much liquidity in the banking industry. For example, if a bank’s deposit is N100 the bank will have to hold N50 with CBN as cash and will only be able to use the remaining N50 for investments and lending. So generally it means banks will have less funds available to them and therefore the money in circulation is reduced. This is my layman understanding of it... Someone should correct me if I'm wrong.

why some banks will be heavily affected some banks might not be e.g Gtb and zenith and partialy first bank.

fidma: banks in Nigeria just wake up and introduced additional 5% interest on loans that is UBA that I had a facility from at 26%,who just informed me that my interest rate is now 31%. I even heard that other banks are higher,reason given was government( CBN) policy. well what ever policy it may be, it is anti people, anti progress, anti development. the economic situation of Nigerians is already hard, undermine the very few that may be comfortable. Lets face the fact Nigerians are not just living below a dollar per day, Nigerians are dying of hunger because all this will further increase prices of all goods and services . I even learnt from grape vine that Nigerian banks goes to Ghana to borrow at 17% to come back to lend to Nigerians at 31% interest rate,so rediculous

The Ghana story is false, no Nigerian bank would take money @17% and survive. But I feel ur pain brov, CRR or no CRR Nigerian banks r merciless.