Access Bank: Inflation to Dip to 15.06%

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  • Access Bank: Inflation to Dip to 15.06%

January inflation rate (year-on-year) will dip lower to 15.05per cent, compared to the 15.37 per cent recorded in December last year, the Economic Intelligence Group of Access Bank has said.

This would mark the 12th consecutive month of moderation from a peak of 18.72 per cent attained in January 2017, the bank stated in a report released yesterday.

“Our methodology adopts an autoregressive analysis of past prices, while it recognises all the assumptions used by the National Bureau of Statistics (NBS) in its computation of monthly composite consumer price index (CCPI),” the group said.

On inflation forecast drivers, the lender said looking in more detail at the drivers, its analysis indicates that the downward trend in inflation rate in January reflected drop in food prices and stability in the currency.

In January, prices of food and non -alcoholic beverages, the largest component in the CPI basket (with a weight of 51.8 per cent) nudged lower supported by ample agricultural supply. According to the survey, prices for staple food commodities notably fish, grains, garri, tomatoes, and tubers ticked downwards in January.

The stabilisation of the naira (on both the official and the parallel rates) amid consistent CBN USD supply in its auctions kept the core index subdued in January. The local unit remained largely flat in the month, averaging N363.68/$ in January at the parallel market relative to N363. 83/$ in December.

“We expect to see continued moderation of fixed income and treasury yields as the inflation rate trends lower. Average 90-day Treasury Bills yields ticked lower to 13.83 per cent in January 2018, compared to 14.86per cent in December 2017. Equities market will continue to benefit in a regime of sustained falling yields on money market investments,” the report said.

Although the naira has stabilised on the parallel exchange rate in recent months, the Central Bank of Nigeria (CBN) will likely remain wary of cutting rates prematurely for fear of triggering any weakness in the local currency.

With no change in the benchmark rate anticipated, we expect the CBN to continue issuance of Open Market Operation (OMO) and stabilisation securities with focus on curbing naira liquidity to reduce speculative USD demand.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of, a digital business media, with over 10 years experience as a foreign exchange research analyst and trader.

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