BUSINESS DAY
Nigeria’s annual inflation quickened for the second straight month, raising the prospect of another interest-rate increase when the Central Bank of Nigeria (CBN) meets later this month.
According to the National Bureau of Statistics (NBS), the Consumer’s Price Index increased to 33.88 percent in October from 32.70 percent reported in September 2024.
Similarly, the month-on-month inflation rate for October 2024 went up to 2.64 percent, from 2.52 percent recorded in September 2024.
According to analysts, this was driven by high petrol prices and reduced food supply resulting from logistics and transportation costs.
The Financial Derivatives Company (FDC) said in its recent economic bulletin that the impact of the naira in the forex market has been profound.
Analysts at CSL Stockbrokers said that the increase in inflation is as a result of increase in pump price and depreciation of the naira.
“For core inflation, it is expected that the lagged effect of the recent increases in petrol pump prices and the continued depreciation of the Naira in the period would exert upward pressure, contributing to a month-on-month increase,” it said.
Data from FMDQ Securities Exchange Limited showed that the naira appreciated by 2.7 percent, or N44.48, with the dollar quoted at N1,645.40 compared to N1,689.88 on Tuesday in the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Financial Derivatives Company said that the Monetary Policy Committee (MPC) will closely watch the movement of the exchange rate, which is the major driver of inflation in Nigeria.
“If there is an appreciation or flatlining of the Naira, it is more likely that the MPC will maintain the status quo. However, if the exchange rate were to fall further, the MPC would have no alternative but to tighten rates again,” the report stated.
READ THE FULL STORY IN BUSINESS DAY
