The Central Bank of Nigeria (CBN) has released the second quarter 2018 Inflation Attitudes Survey, which showed that interest rates had risen in the last 12 months by 0.8 points to 32.4 points. The first quarter figure stood at 31.6 points.

The survey, conducted from May 19 to June 7, 2018 through a sample size of 2070 households randomly selected from 207 Enumeration Areas (EAs) across the country, had a response rate of 80.4 per cent.

On the other hand, 7.4 per cent of respondents believed that interest rates had fallen, 17 percent of the respondents were of the opinion that the rates stayed about the same in the last 12 months, while 43.2 per cent of the households had no idea. 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 per cent) were of the view that the rates will rise, while 15.6 per cent believed that they will rates fall.

According to the survey, a net rise value of 10.9 per cent was recorded compared to 9.4 per cent attained in the previous quarter. About 57.8 per cent 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 per cent indicated that it would be best for the economy if interest rates fell, while 12.8 per cent opted for higher interest rates.

The results further revealed that 13.2 per cent would make no difference, while 35 per cent had no idea. Also, these responses revealed that most of the respondents favored lower interest rates for the Nigerian economy.

Responses on what the impact a rise in interest rates in the short and medium terms would have on prices, 40 per cent agreed that a rise in interest rates would make prices in the street rise slowly in the short term, as against 14.0 per cent that disagreed. While in the medium term, 39.2 per cent agreed that a rise in interest rates would make prices in the street rise slowly, 13.5 per cent disagreed.

Similarly, 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. Responding, 26.3 per cent preferred interest rates to rise in order to keep inflation down compared to 28.0 per cent who said they would prefer prices to rise faster, while 45.6 per cent had no idea.

The survey showed that these responses suggest that given a trade-off, more of the respondents would prefer higher interest rates to higher inflation, which is suggestive of the respondent households’ support for the bank’s price stability objective.

To assess whether people are aware of the way monetary policy works in Nigeria, respondents were asked if they knew which group of people met to set Nigeria’s monetary policy rate.

Responding, 27.6 per cent felt it was the Monetary Policy Committee, 10 per cent felt it was the Federal Ministry of Finance, 17.0 per cent believed it was the government, 4.7 per cent felt it was the National Assembly, while 2.3 and 38.3 per cent answered ‘others’ and ‘do not know’, respectively.

More so, when asked to identify which group mostly influenced the direction of interest rates, the result indicated that majority of the respondents (40.6 per cent) were aware that the Central Bank of Nigeria influences the direction of interest rates.

About 8.7 per cent mentioned the ministers, 4.3 and 10.8 per cent was of the opinion that civil servants and banks influence the rates, respectively, while 35.4 per cent had no idea. On what best described the Monetary Policy Committee, 20.6 per cent felt it was influenced by the government, 12.6 per cent felt it was the Federal Ministry of Finance, and 8.1 per cent believed that it was the national assembly, while 10.7 per cent thought it was not influenced by any arm of government and 47.4 per cent had no idea.

Respondents were asked if they were satisfied or dissatisfied with the CBN’s management of interest rates in Nigeria.

They were “asked what would become of the Nigerian economy if prices started to rise faster than they do now”. “The survey result showed that 49.7 per cent of the respondents believed that the economy would end up weaker, 11.0 per cent stated that it would be stronger, 17.7 per cent of the respondents believed it would make a little difference, while 21.5 per cent did not,” the survey showed.