Experts fear CBN may further hike rates
Omeiza Bilal
Chief Executive of Financial Derivatives Company (FDC) Limited Bismarck Rewane has insisted that the Central Bank of Nigeria (CBN) might maintain its stand by further interest rates increase.
The CBN has at its last Monetary Policy Committee meeting raised the interest rate to 27.25 per cent.
In an analysis of the inflation trend at the weekend, noted that the country’s inflation continues on its upward trajectory despise the CBN’s
efforts to increase interest rates and impose money supply constraints.
“He now came to the conclusion that it is most probable that inflation is driven by output constraints rather than money supply saturation.
“Hence, October’s data sets the stage for a pivotal policy response. More likely than not, CBN is expected to increase interest rates again.”
According to Rewane, this suggests that, “Nigeria’s inflation is more structural than transient.
Headline inflation surged by 1.18 per cent to 33.88 per cent in October from 32.70 per cent, marking the highest level since July 2024.
The rate of increase was far higher than analysts’ expectations. The consensus opinion was 33.4%. The major reason for this astronomical increase was a combination of factors.
The most prominent catalyst of inflation this time was the energy costs.
In the month of October gasoline price increased by 14 per cent cumulatively to N1,030/litre. The inflation data showed that the prices of food and non-alcoholic beverages contributed 17.55 per cent to headline inflation.
Both food and core inflation moved in tandem with headline inflation as food inflation jumped by 1.39 per cent to 39.16 per cent while core inflation rose to 28.37 per cent.
