Contrary to expectations of a further rise in the Consumer Price Index (CPI), the rate at which prices of goods and services rise in the country slowed in October 2018, dropping to 11.26 per cent.
This is compared to 11.28 per cent that was recorded in September as inflation slowed after it rose for two months. Data released by the National Bureau of Statistics (NBS) showed that on month-on-month basis, the headline index increased by 0.74 percent in October 2018, down by 0.09 percent points from 0.83 per cent recorded in September 2018.
The percentage change in the average composite CPI for the twelve months period ending October 2018 over the average of the CPI for the previous twelve months period was 12.78 percent, from 13.16 percent recorded in September 2018.
The rate of increase in urban inflation rate slowed to 11.64 percent, year-on-year last month from 11.70 percent recorded in September 2018, while the rural inflation rate increased by 10.93 percent in October 2018 from 10.92 percent in September 2018.
On a month-on-month basis, the urban index rose by 0.76 percent in October 2018, from 0.86 percent recorded in September, while the rural index also rose by 0.72 percent in October 2018, down from 0.82 per cent recorded in September 2018.
Research Analyst at FXTM, Lukman Otunuga noted that while the CPI report is somewhat encouraging, markets need to see further signs of inflationary pressures easing.
The Monetary Policy Committee of the Central Bank of Nigeria (CBN) started deliberations on monetary policy yesterday and is expected to announce decisions today, Thursday. Analysts opined that the MPC will keep rates unchanged putting into consideration the rising inflation and normalisation of rates by the Federal Reserve of the United States.
Otunuga noted that the inflation figures are unlikely to impact the Central Bank of Nigeria’s (CBN) monetary policy decision but could play a role in what steps are taken by the CBN at the next meeting in the first quarter of 2019.
“There will be a strong focus on November and December’s CPI figures, which most likely will shape monetary policy expectations for the first quarter of 2019
“Away from inflation figures, the steep decline in Oil prices could threaten Nigeria’s economic recovery. If oil prices remain depressed and government revenues end up taking a hit, the impacts are likely to be reflected on the Naira.”