Nigerian Inflation Hits Fresh 17-Year High Stokes By Naira Slide

LAGOS OCTOBER 18TH (NEWSRANGERS)-Nigeria’s inflation rate hit a fresh 17-year high in September, stoked by a slide in the value of the naira that raised the cost of imported goods like gas and liquid fuel.

Annual inflation accelerated to 20.8%, compared with 20.5% in August, according to data released by the National Bureau of Statistics on its website on Monday. That’s the highest level since September 2005. The median estimate of seven economists in a Bloomberg survey was 21%.

Inflation has now been more than double the 9% ceiling of the central bank’s target band for four months and is likely to be fanned by the continued depreciation of the naira that’s declined almost 4% against the dollar this year and the worst flooding in a decade. The floods have submerged 108,392 hectares (267,840 acres) of farmland, the humanitarian affairs ministry said on its Facebook page.

Upward price pressures and expectations of more aggressive rate hikes in the US that’s attracting international investors away from emerging markets may see the Central Bank of Nigeria’s monetary policy committee lift borrowing costs for a fourth successive meeting in November.

Governor Godwin Emefiele warned at the bank’s September meeting that policy makers would further hike rates as long as inflation remains stubbornly high. Finance Minister Zainab Ahmed said in a Bloomberg interview that the government hopes in the next three months that inflation “should plateau and begin to go down.”

The food index, which accounts for more than half the inflation basket, rose 23.3% from a year earlier, compared with 23.1% in August. Core inflation, which excludes agriculture produce, quickened to 17.6% in September, compared with 17.2% in the previous month. Prices rose 1.36% from a month earlier.