Connect with us

Markets

Inflation is Out of CBN’s Control – Expert

Published

on

consumer price index - Investors King
  • Inflation is Out of CBN’s Control

Olusegun Omisakin, the Head of Research, Nigerian Economic Summit Group (NESG), says rising inflation rate in the country has gone beyond the control of Central Bank of Nigeria (CBN).

Omisakin made the observation in an interview with the News Agency of Nigeria (NAN) on Monday in Lagos.

NAN reports that data released by the National Bureau of Statistics (NBS) on Jan.13 showed that December 2016 inflation rate stood at 18.55 per cent from 18.48 per cent in November.

Inflation targeting is a major economic policy objective of CBN and this has been the focus of its Monetary Policy Committee (MPC).

The apex bank, on July 26, 2016, increased the Monetary Policy Rate (MPR) by 200 basis points from 12 per cent to 14 per cent to check inflation.

The CBN retained all key indicators at its September and November MPC meetings to keep MPR at 14 per cent, Cash Reserve Ratio at 22.50 per cent and the Liquidity Ratio at 30 per cent, all aimed at controlling inflation.

Omisakin said that the rising inflation had defied CBN’s monetary policy measures, adding that policy tools adopted by the apex bank were only effective in taming inflation arising from demand-supply imbalances.

“In this case, inflation is cost-push. Production cost is high because producers who want to import intermediate goods for production do not have access to foreign exchange.

“Most of them go to the black market and definitely the product from this would be expensive, thereby increasing inflation.

“The CBN cannot do anything through the monetary policy rate to arrest this inflation even if CBN increases the MPR to 20 per cent. Inflation would not come down.

“The inflation we are experiencing now is out of the control of CBN. CBN can only address issues that have to do with availability and circulation of money and credit control.

“CBN cannot address cost-push inflation because it cannot provide energy, roads, transport. There are fiscal issues,” Omisakin said.

The economist urged the CBN to formulate policies that would boost industrial production and economic growth in view of the current economic recession.

Omisakin called for coordination of fiscal and monetary policies to check the rising inflationary trend in the country.

“The rising cost of food, transport and energy will reduce if the Federal Government creates concrete fiscal policies with effective implementation to address the situation through increased investment in infrastructure and agriculture,” he said.

The expert said that speedy passage and effective implementation of the 2017 budget would stimulate economic activities

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

Published

on

Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

Continue Reading

Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

Published

on

Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

Continue Reading

Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

Published

on

Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending