- Inflation Continues to Cool in June
Cost of goods and services in Nigeria continue to moderate in June following the surge in forex liquidity in the country.
The consumer prices which measures inflation rose 16.10 percent year-on-year in June, according to the National Bureau of Statistics report released on Monday. This was 0.15 percent lower than the 16.25 percent recorded in May. Indicating that the continuous gain of the Naira and sustained forex intervention by the Central Bank of Nigeria has continued to cool prices and broaden improvement across key industries.
On a monthly basis, inflation rate increased by 1.58 percent in June, down 0.30 percent from 1.88 percent gain recorded in May. So far, month-on-month inflation has cumulatively risen by 9.28 percent since January.
However, prices of food remains high, rising 19.91 percent in June, up 0.64 percent from 19.27 percent recorded in May. Suggesting continued pressure in food prices.
Since the launched of Investors and Exporters forex window in April, the economy has witnessed a surge in capital importation with the Nigerian equities market alone attracting N2.715 trillion in investments.
This has helped improve forex availability in the country and aid the Naira’s value against the US dollar.
However, some experts have said if OPEC go ahead to request a production cap from Nigeria as widely suggested, the ongoing forex intervention would suffer and so would progress record thus far.
“Production cut would hurt current progress,” said Samed Olukoya, a foreign exchange research analyst at Investors King Ltd. It is unclear if the surge in production level recorded in June can be sustained going forward or a one-time thing, therefore, it would be premature to cap production based on a single month data.”