Bank Depositors Lose N218.5 bn to Inflation
Economy
By Ayodele Aminu and Olugbuyiro Akinola
Depositors with Nigerian banks may have recorded a net loss of N218.5 billion to inflation in June 2004, according to the Central Bank of Nigeria's monthly report for the period.
The analysis is based on the rising general price levels plaguing the Nigerian economic environment which has constituted a great source of concern to the apex bank.
THIS DAY analysis of the CBN's reports revealed that while the total deposit liabilities to the money banks amounted to N3.495 trillion In June 2004, the depositors with highest bracket of returns had an estimate of N470 billion in nominal gains. The rate of inflation for the twelve-month period end- June, the Apex bank noted, was estimated at 19.7 per cent, compared with 19.4 per cent recorded in May.
When THISDAY computed inflation figure for June against the total deposits which stood at N3.495 trillion during the review month, it indicated a loss of N688.515 billion in real value to the banking system.
Given this scenario, if the nominal returns of N470 billion on deposits is discounted against the inflationary pressure rate of 19.7 per cent, the real net loss would be N218.51 billion.
It should be noted that the foreign exchange price index which would have further eroded the depositors' funds only had marginal effect as naira stabilised against the United States' dollar for the better part of June 2004.
However, computing 3.32 percent least rate of returns in the system against the deposits of N3.459 trillion amounted to a nominal return of N116.034 billion as at the end of June 2004.
The CBN's report further disclosed that at 3.32 per cent base rate of returns, there was a net lost of N 552.48 billion, if N116.034 billion is taking from the gross sum of N688.515 billion recorded as loss to high inflation pressure.
According to the apex bank, the estimate rate of inflation in June was 0.3 and 9.6 percentage points higher than the level in the preceding month and corresponding month of 2003, respectively.
"The upward inflationary pressure reflected the persistent effect of the increase in the prices of petroleum products on transportation and other costs." the banking watchdog has said.
In a report of the Federal offices Statistics (FOS) data for June 2004, all items composites consumer price index (CPI) was estimated at 123.2 per cent, representing increases of 2.8 per cent over the levels in the preceding month.
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