Nigeria's inflation drops for 14th consecutive time to 13.34%

The central bank would consider cutting interest rate when inflation slows closer to single digits

Nigeria's inflation rate dropped for the 14th consecutive month to 13.34% in March, year on year from 14.33 in February.

The National Bureau of Statistics (NBS) disclosed this in its CPI report for March released on Thursday, April 12, 2018, in Abuja, the nation's capital.

The Bureau said the Consumer Price Index (CPI) which measures inflation increased by 13.34%  (year-on-year) in March 2018. This fourteenth consecutive disinflation since January 2017 is 0.99% points less than the rate recorded in February 2018 (14.33%).

The report states that: “Increases were recorded in all COICOP divisions that yield the Headline Index.

“On a month-on-month basis, the Headline index increased by 0.84 percent in March 2018, up by 0.05 percent points from the rate recorded in February.

“The percentage change in the average composite CPI for the twelve month period ending March 2018 over the average of the CPI for the previous twelve month period was 15.60 percent, showing 0.33 percent point lower from 15.93 percent recorded in February 2018.

“The Urban inflation rate eased by 13.75 percent (year-on-year) in March 2018 from 14.76 percent recorded in February, while the Rural inflation rate also eased by 12.99 percent in March 2018 from 13.96 percent in February.

Market expectation

Analysts have projected the nation's annual inflation to decelerate further and predicted rate below 14% in March.

Omotola Abimbola, analysts at Afrinvest told Business Insider Sub Sahara Africa that his firm predicted a moderation in year on year inflation to 13.4% in March from 14.3% percent in February 2018.

MPC decision on lending rates

The Central Bank of Nigeria Monetary Policy Committee last week retained all key lending rates in a bid to continue to support the Naira and curb inflations.

The MPC retained MPR which was at 14%, Cash Reserves Ratio at 22.5%, Liquidity Ratio which was left at 30%; and the Asymmetric Window which was left at +200 and -500 basis points around the MPR.

Godwin Emefiele, CBN governor, also hinted that the bank would consider cutting rates from where they have been since July 2016, when inflation slows closer to single digits