Nigeria’s Inflation Hits Its Lowest Level in Three Years at 18%
Nigeria’s inflation rate has decreased to 18%, the lowest level in three years, increasing the likelihood of another rate reduction. in November.
For the first time in three years, Nigeria’s inflation rate has fallen below 20%, raising hopes that the Central Bank of Nigeria (CBN) may consider cutting interest rates again when its Monetary Policy Committee (MPC) meets next month.
Annual inflation decreased to 18% in September from 20.1% in August, according to data issued by the National Bureau of Statistics (NBS) on Wednesday. The number was also below than the median prediction of 19% from an economist survey conducted by Bloomberg. Month-over-month, consumer prices increased by 0.7%.
A decrease in the prices of important staples at the start of the harvest season and a rise in crude oil production, which helped stabilize the naira, were the main causes of the dip.
This is the sixth consecutive month that disinflation has occurred, which gives analysts more hope that the CBN would further reduce borrowing costs at its next meeting on November 25. The benchmark interest rate was lowered by the MPC in September for the first time in five years, by 50 basis points to 27%.
CBN Governor Olayemi Cardoso at the time stated that a persistent downward trend in inflation was supported by the “lagged effects of previous rate hikes, continued stability in the foreign exchange market, and a decline in gasoline prices.”
However, recent events, like as an oil workers’ strike in late September that momentarily halted output and operational issues at the Dangote Refinery that resulted in short-term fuel shortages, are anticipated to be closely watched by the central bank.
While core inflation, which does not include volatile goods like food and energy, decreased to 19.5% from 20.3% in September, food inflation fell precipitously to 16.9% from 21.9% in the same month.
Nigeria’s disinflation trend is picking up steam, according to economists, providing cautious respite to investors and people as the economy steadily stabilizes.
