Should the CBN Print Money To Finance Fiscal Deficits?, By Nasiru Aminu

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Since inflation will be one of the consequences of printing more money, it means that the naira will be further weakened.

As an import-dependent economy, a weakened currency will create further shocks for the economy, especially if there are existing problems in the foreign exchange market.

Secondly, monetisation is easier if it is interest-free, but this is not the case here. The CBN is also paying interest on existing bank reserves. Advanced economies currently monetising public deficits have reduced their interest rates to near 0 per cent. Excessive spending would crowd out private investment, though this may not be an issue if the central bank keeps low-interest rates. The CBE reduced its interest rate from 18.75 per cent in 2017 to 8.5 per cent in 2020.

 

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On whose authority was the 60 billion printed, don’t come asking for permission from anyone it what you have been doing

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No. But printing money isn't a bad idea.

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