Markets anticipate further drop in Nigeria inflation
From OKORO CHINEDU in Lagos, Nigeria
LAGOS, (CAJ News) – ANALYSTS, buoyed by a rare reduction, have projected the Nigeria’s inflation rate to further drop in the short and long term.
The forecasts follow the results the National Bureau of Statistics released earlier this week indicating the first decline in headline inflation for 13 months, to 17,8 percent year-on-year in February from highs of 18,7 percent.
“Our suspicion, however, is that it will want to see further declines in inflation before easing,” market watcher, First Bank Nigeria, stated.
“We see another slowdown in the headline rate in March, to 16,6 percent year-on-year,” the think-tank stated.
Rand Merchant Bank, in its latest global markets update, expects inflation to average 14 percent in 2017 compared to 16, 6 percent in 2016.
The financial house noted under pressure to narrow the gap between the official and the parallel market, the Central Bank of Nigeria devalued the Naira for certain retail customers by selling dollars at 20 percent above the official rate, thereby partly alleviating the pressure on the parallel market.
“Moreover, the bank has also stepped up dollar sales into the market,” RMB stated.
The finance house noted as a result of the measures, the Naira was now trading at 457 against the Dollar on the parallel market, having weakened to an all-time low of 516 in February, thereby limiting the foreign exchange pass-through to inflation.
– CAJ News
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