On our Visit to the Central Bank of Nigeria, we were opportune to meet with the Head of the Communication Department Mr Uche who was also the Guest Speaker for the Visitation. In his Speech, He talked about something very very important though funny but arrest the mind of we the listeners. He said and i quote "one of the major duty of every central bank of the world is to control the three Economy prices" which he also refer to as the UNHOLY TRINITY. He went further to say that this prices can not be control all at the same time, this is when it all started getting interesting.
when one is been controlled, it affect the other by making it rise or drop and as such all must be maintained to have a price stable economy. This is why they are regarded as the Unholy Trinity. What then are this Economy Prices? Hmmmmmm
Well lets spit out. They are:
1.INFLATION RATE
2.INTEREST RATE
3.EXCHANGE RATE
INFLATION RATE: The inflation rate is the rate at which there is increase in the circulation of money. According to investopedia.com Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.
According to the National Bureau of Statistics, Nigeria. The inflation rate in Nigeria was recorded at 9.20 percent in July of 2015. Inflation Rate in Nigeria averaged 12.18 percent from 1996 until 2015, reaching an all time high of 47.56 percent in January of 1996 and a record low of -2.49 percent in January of 2000. Tradeeconomics.com recorded that In Nigeria, the Consumer Price Index (CPI) measures the change over time in prices of 740 goods and services consumed by people for day-to-day living. The index weights are based on expenditures of both urban and rural households in the 36 states. The most important categories in the CPI are Food and Non Alcoholic Beverages (51.8 percent of total weight); Housing, Water, Electricity, Gas and Other Fuel (16.7 percent) and Clothing and Footwear (7.7 percent). Transports account for 6.5 percent of total index and Furnishings and Household Equipment Maintenance for 5 percent. Education represents 3.9 percent of total weight, Health 3 percent, Miscellaneous Goods and Services 1.7 percent and Restaurants and Hotels 1.2 percent. Alcoholic Beverages, Tobacco and Kola account for 1.1 percent of total index, Communications for 0.7 percent and Recreation and Culture for the remaining 0.7 percent. Below are the - Nigeria Inflation Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for - Nigeria Inflation Rate - was last refreshed on Tuesday, September 8, 2015.
Interest Rate: Interest rate is the rate at which interest is paid by borrowers (debtors) for the use of money that they borrow from lenders (creditors). Specifically, the interest rate is a percentage of principal paid a certain number of times per period for all periods during the total term of the loan or credit. According to Investopedia.it is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR). The assets borrowed could include, cash, consumer goods, large assets, such as a vehicle or building. Interest is essentially a rental, or leasing charge to the borrower, for the asset's use. In the case of a large asset, like a vehicle or building, the interest rate is sometimes known as the "lease rate". When the borrower is a low-risk party, they will usually be charged a low interest rate; if the borrower is considered high risk, the interest rate that they are charged will be higher. Read more: Interest Rate Definition | Investopedia http://www.investopedia.com/terms/i/interestrate.asp#ixzz3l7mflvpi
According to the Central Bank of Nigeria, The benchmark interest rate in Nigeria was last recorded at 13 percent. Interest Rate in Nigeria averaged 9.92 percent from 2007 until 2015, reaching an all time high of 13 percent in November of 2014 and a record low of 6 percent in July of 2009. tradeeconomics.com recorded that In Nigeria, interest rate decisions are taken by The Central Bank of Nigeria. The official interest rate is the Monetary Policy Rate (MPR). This - Nigeria Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for - Nigeria Interest Rate - was last refreshed on Tuesday, September 8, 2015.
EXCHANGE RATE: The Exchange Rate is that rate at which one currency will be exchange to another. According to Wikipedia.com an exchange rate (also known as a foreign-exchange rate, forex rate, FX rate or Agio) between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency.
In summary, this three prices are maintained, control and measured on a scale for balancing so that there will be balance in all three economic price. I must say, it was a wonderful Experience at The Central Bank of Nigeria with Mr Uche and His other Colleagues.
References:
investopedia.com
fx rate Nigeria
wikipedia.org
tradeeconomics.com
No comments:
Post a Comment