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Nigeria's inflation rate rises again
Nigeria’s headline inflation rose for the second time this year to 11.28 per cent year-on-year in September. Ajike Taiwo, Research Analyst at FSDH Merchant Bank joins CNBC Africa to discuss the facts behind the numbers.
Tue, 16 Oct 2018 11:34:05 GMT
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AI Generated Summary
- Discussion on the significant uptick in food prices and core inflation, emphasizing the need to address food basket issues for sustained improvement
- Forecasts predicting inflation to hover around 11% with a slight increase expected in December, primarily driven by food inflation factors
- Insights on imported inflation trends, exchange rates dynamics, and the potential impact of currency devaluation on inflation, with considerations of global capital flight trends
Nigeria's headline inflation rate has risen once again, reaching 11.28 per cent year-on-year in September. This marks the second increase in inflation this year. Ajike Taiwo, Research Analyst at FSDH Merchant Bank, joined CNBC Africa to delve into the implications of these numbers. In the interview, Taiwo highlighted the significant month-to-month uptick in food prices and core inflation. She emphasized the importance of addressing issues in the country's food basket areas to sustain this positive trend. Despite expectations of monetary policy tightening, Taiwo noted that changes in policy might not have a substantial impact on the current cost-push inflation Nigeria is experiencing. Looking ahead, Taiwo forecasted that inflation would likely hover around 11%, with a slight uptick to 11.6-12% expected in December, mainly driven by food inflation factors. When discussing imported inflation and exchange rates, Taiwo pointed out a deceleration in the imported food index in September, which could mitigate some inflationary pressures. She dismissed immediate concerns about significant currency devaluation, attributing stability to ongoing dynamics and the upcoming elections. While acknowledging potential future devaluation, Taiwo speculated that the central bank's actions would be crucial in determining the extent of any currency adjustment. Lastly, Taiwo commented on the global trend of capital flight from emerging markets due to rising US interest rates, hinting at possible implications for Nigeria's exchange rate dynamics. Overall, the discussion provided valuable insights into the complex interplay of factors influencing Nigeria's inflation landscape.
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