CBN Targets Single Digit Inflation, Lower Food Prices

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 The governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, said yesterday that he expects inflation in the country to drop at a faster rate to single digit by next year, as food prices decline.

Emefiele who gave a keynote address at the launch of Afrinvest 2017 Banking Sector Report on the London Stock Exchange (LSE) said as the economy begin to hit thresholds on inflation and other gauges, he expects the Monetary Policy Committee (MPC) of the apex bank would begin to look at interest rate cuts a bit more favourably and think about easing.

“We are very optimistic that food prices will come down and as they come down, it will help to complement the reduction in core inflation,” Emefiele told journalists on the sidelines of Afrinvest 2017 Banking Report launch at the London Stock Exchange, adding that he expected a “more aggressive moderation.”

“We are hoping that by the middle of next year we should begin to approach the high single digits,” he said.

Around nine percent would be a good target.

“I would like to see low interest rates and I would like to see low inflation and I would be happy to see it as quickly as possible. When? I cannot categorically say.”

Answering question about the outlook for unifying the country’s multiple exchange rates, Emefiele said Nigeria needs to see more foreign investors coming and is analysing the situation on which further steps to take.

Data released by the National Bureau of Statistics (NBS) in its latest publication of the Consumer Price Index showed that Nigeria’s annual inflation rate marginally slowed for an eighth-month in September, easing to 15.98 per cent.

This was 0.03 per cent points lower than the rate recorded in August’s 16.01 per cent, making it the eighth consecutive decline in the rate of headline year-on-year inflation since January 2017.

However, the food price index showed a marginal rise in inflation at 20.32 per cent in September, up from 20.25 percent in August.

Nigeria, which has Africa’s largest economy, emerged from its first recession in 25 years in the second quarter as oil revenues rose. But the slow pace of growth suggests the recovery remains fragile.

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