The Monetary Policy Committee(MPC) of the Central Bank of Nigeria (CBN) will meet today for its 297th meeting that will end tomorrow September 24, 2024 at the nation’s capital, Abuja. At the end of this meeting, the CBN is expected to address the fundamental issues facing the economy.
Meanwhile, analysts at Afrinvest are envisaging that the apex bank in the country will maintain a hold on the benchmark interest rate, the Monetary Policy Rate (MPR) in the face of declining inflation in the country. It should be recalled that inflation has declined for the second consecutive month in August.
According to the recent inflation data from the National Bureau of Statistics (NBS), inflation fell from 34.19 percent in June to 33.40 percent in July and further to 32.15 percent in August 2024.
“This week, we share our views on the upcoming MPC meeting on September 23-24 and our inflation outlook amidst emerging risks from the energy sector. Kicking off with the CPI data, the latest NBS report shows that headline inflation rate slowed for the second consecutive month to 32.15% y/y in August, against 33.40% previously. This annual print, 11bps higher than our projection of 32.04%, stemmed from slower-than-expected moderation in m/m price growth to 2.22% from 2.28% reported in July – albeit, below the 12-month average of 2.43%.
“Disaggregating the CPI basket, food inflation eased 10bps m/m to 2.37% (previously: 2.47%), driven by softer price increases in commodities like tobacco, tea, cocoa, and coffee, alongside the impact of the green harvests on key crops. Resultantly, annual food inflation eased to 37.52%, from 39.53%, reaching the lowest in seven months. Meanwhile, core inflation logged at 2.27% m/m in August, its strongest pace since March. Consequently, annual core inflation sustained its uptrend for the ninth straight month, printing at 27.58%. This negative trend rode on the back of firm price increases in Transportation (2.7% m/m), House equipment (1.9%), and Utility (1.9%),” Afrinvest said.
