Nigerians Prefer High Inflation To High Interest Rate
A new survey by the Central Bank of Nigeria, CBN has shown that if given the right to choose, that most Nigerians would prefer prices of goods and services rise than cost of borrowing to remain high.
According to the CBN Q2 Inflation Attitudes Survey released on Monday, “respondents were asked to choose between raising interest rates in order to keep inflation down and keeping interest rates down to allow prices to rise.
“In response, 26.3% preferred interest rates to rise in order to keep inflation down compared to 28.0% who said they would prefer prices to rise faster, while 45.6% had no idea.”
According to the apex bank, the percentage of respondent households who felt that interest rates had risen in the last 12 months rose by 0.8 points to 32.4 points in the current quarter when compared to 31.6 points attained in Q1, 2018.
“The result revealed that more households perceived that interest on bank loans and savings rose over the past 12 months.”
On the expected change in interest rates on bank loans and savings over the next 12 months, more respondents (26.6%) were of the view that the rates will rise, while 15.6% believed that the rates will fall.
A net rise value of 10.9% was recorded compared to 9.4% attained in the previous quarter. About 57.8% of the respondents either expected no change or had no idea.
Similarly, the respondents were asked whether it would be best for the Nigerian economy for interest rates to rise or fall.
“The results showed that 37.2% indicated that it would be best for the Nigerian economy if interest rates fell, while 12.8% opted for higher interest rates.
“The results further revealed that 13.2% thought that it would make no difference, while 35.0 had no idea. These responses revealed that most of the respondents favored lower interest rates for the Nigerian economy,” it added.