The recent ban on the sale do foreign exchange (forex) to Bureau De Change (BDCs) may force down inflation, which currently stand at 17.4 per cent in July to 13.8 per cent in August, Bismarck Rewane, Chief Operating Officer (COO) of the Financial Derivatives Company (FDC) Limited has predicted.
“Looking ahead, we expect the impact of the pressure on the Naira from the recent ban on FX sale to BDCs to drive core inflation rate to 13.8 per cent year-on-year (y/y) (1.4 per cent month-on-month (m/m)) in August.
“”Nevertheless, we believe that the impact of a high base-year effect on food inflation would result in further moderation of the headline index to 16.9 pet cent in August 2021”,, he said.
The July 2021 Consumer Price Index (CPI) report published by the NBS last week revealed that the headline inflation rate fell for the fourth consecutive month to 17.4 per cent y/y from 17.8 per cent in June.
On an m/m basis, the index fell 31bps to 0.9 per cent – the lowest level since March 2020. The decline in the headline inflation was mainly driven by the sharp moderation in the food inflation sub-component, as it ebbed 80 basis points (bps) y/y and 31bps m/m to 21.0 per cent and 0.9 per cent respectively.