MPC outcomes:
In Nigeria, we have become aware that every decision, action and inaction of the government affects our everyday lives. Beyond religion, we are in Nigeria, and our life’s progression is influenced by government policies.
What is my business with the Monetary policies? Let’s dive into how the meeting held on the 24th of September 2024, will influence us and what actions we can take.
When the MPR is increased, interest on loans will increase and, in most cases, interest on existing loans will increase. Are you still wondering why?
Most of us, prefer to borrow from commercial banks. Their payday loan and digital products are our preferred because their rates are not comparable to the Fintechs. CRR increase by CBN means that cash available to these banks to lend is now reduced by 50%. So, this will push up the cost of funds, which will be passed down to US… the men and women in the street. This also implies that your fixed deposit rates should be more competitive.
Financial planning is critical to survival in a turbulent economy. These are actions I will take to overhaul my finances. You can join me in this personal damage control approach….
1. Pay down my existing loans. Please note that your focus should be reducing outstanding principal. It is called principal repayment or principal payoff.
2. Move my small savings to a higher interest-yielding instrument. It is pertinent to use organisations you can trust. Go to nairacompare.ng and compare competitive rates.
3. Inflation will go up, therefore put a tight rein on your spending. Remember you have made profit by minimising expenses. The heads will pass, and you will thank me.
THE FUTURE
So, let’s tighten up, relax, ride the storm like an eagle, and observe how these tightened monetary policies will impact trends such as inflation, and exchange rate stability, and safeguard the financial system according to CBN.