September inflation rate to increase – FSDH

The September 2016 inflation rate (year-on-year) may increase to 18.14% from 17.61% recorded in the month of August 2016, the FSDH Research, a subsidiary of FSDH Merchant Bank Limited, has said.

It disclosed that most of the divisions which contributed to the headline inflation could rise due to continued pressure on the value of the Naira.

The National Bureau of Statistics (NBS) is expected to release the inflation rate for September 2016 on October 15, 2016, based on the data calendar on its website.

The Food Price Index (FPI) that the Food and Agriculture Organisation (FAO) released on October 6, 2016, showed that the FPI increased in September, the highest figure since March 2015. The Index was up by 2.9% compared with August, mainly due to the increase in dairy prices with moderate price increases in sugar, meats and oils.

“Our analysis indicates that the value of the naira appreciated at the interbank market by 1.48% while it depreciated at the parallel market by 12.32% in September 2016. The Naira gained N4.62 to close at US$/N311.62 at the inter-bank market while it lost N59 to close at US$479 at the parallel market”, it said.

It noted that the depreciation recorded in the exchange rate in the parallel market between the two months and higher prices in the international market would continue to put pressure on domestic prices.