The year-on-year (y/y) headline inflation rate is expected to further moderate in September to 16.7 per cent on high base-year effect, said Analysts at Afrinvest.
“We see the pressure on the month-on-month (m/m) index being sustained in the near term, in reflection of the high cost of energy commodities (especially PMS), imported inflation, and exchange rate pressure amongst others.
Meanwhile, the Nigerian Bureau for Statistics (NBS) last Tuesday published the August 2021 Consumer Price Index (CPI) report which revealed that the headline inflation rate moderated for the fifth consecutive month (by 37bps y/y) to 17.0 per cent, marginally beating our projection of 16.9 per cent. The decline in the y/y headline inflation rate was jointly due to a 31bps and 73bps y/y decline in food inflation and core inflation rate to 20.3 per cent and 13.4 per cent respectively, supported by a high base-year effect from 2020.
However, the headline inflation rate climbed by 10bps m/m to 1.0 per cent (July: 0.9%). Interestingly, while the food inflation rate rose 20bps m/m to 1.1 per cent, the core inflation rate moderated by 53bps to 0.8 per cent in August 2021.
Last week, the Monetary Policy Committee (MPC) maintain status-quo as high base-year effect further tapers inflation rate.
At the end of its 138th bi-monthly Monetary Policy Committee (MPC) last week, the Central Bank of Nigeria (CBN) retained all monetary policy parameters at current levels – Monetary Policy Rate (MPR):11.5 per cent, Asymmetric Corridor +100/-700 basis points (bps), Liquidity Ratio (LR):30.0 per cent, and Cash Reserve Ratio (CRR):27.5 per cent.
