The apex bank recently raised the benchmark interest rate by 150 basis points from 11.5 per cent to 13 per cent. MPR is the rate at which the bank lends to commercial banks and often determines cost of funds in the economy.
Housing development is a capital-intensive venture, which requires huge financial obligations. Getting loans from banks comes with tough requirements and ridiculously high rates making accessibility difficult. According to him, with rate of MPR, the cost of borrowing will be about 30 per cent and cost of housing production will skyrocket, while cost of rent will increase as the developer factors every costs incurred to maximise profits.
He cited the case of the United States of America, where interest rate is about three and one per cent but recently increased to about 3.5 per cent. The increase in the rate, he observed, had a negative effect on the market.
Hahahahahahahaha. E no Dey scare me again.