MONDAYBUSINESS MONEY MATTER Inflation rate to drop further in October – Analysts

FSDH Research expects the inflation rate (year-on-year) to drop marginally to 15.91% in October 2017 from 15.98% reported in the month of September 2017.

The expected marginal decline in the inflation rate is premised on slower increase in the food and non-food divisions, compared with the previous month.

Based on the data release calendar on the website of the National Bureau of Statistics (NBS), the rate for the month of October 2017 will ne released on November 18, 2017.

The monthly Food Price Index (FPI) that the Food and Agriculture Organization (FAO) released today shows that the Index averaged 176.4 points, 1.26% lower than the revised value for September 2017, but 2.45% higher than the October 2016 figure. According to the FAO, all categories of commodities used in the calculation of the Index dropped in value with the exception of cereal.

Increased competition amongst exporters and sufficient supplies weighed on the prices of wheat. Our analysis indicates that the value of the Naira depreciated at the interbank market, while it appreciated at the parallel market. The Naira lost by 0.02% at the inter-bank market to close at US$/ N305.80 while it gained 0.83% at the parallel market to close at US$/N362.50 at the end of October.

The Naira appreciation in the parallel market and the drop in the prices of food at the international market led to a drop in the prices of some consumer goods in Nigeria.