Nigeria’s Declining Inflation is likely to Encourage a Shift Towards an Accommodative Monetary Stance

    A towel with a print of the Nigerian naira is displayed for sale at a street market in the central business district in Nigeria's commercial capital Lagos February 4, 2016. Picture taken February 4, 2016. REUTERS/Akintunde Akinleye/File - RTSJQR1

    Nigeria’s Year-on-Year inflation dipped further in the month of January to 15.13%, in line with our projection. This also marks the 12th consecutive monthly decline in Y-o-Y headline inflation since February 2017.

    However, Month-on-Month (M-o-M) inflation increased to 0.80% (10.03% annualized) from 0.59% (7.31% annualized) in December. The rise in M-o-M inflation was partly due to an increase in transport fares attributable to the spasmodic fuel scarcity across the country.

    This continued trend of declining inflation is likely to encourage a shift towards a more accommodative monetary stance and lower interest rates whenever the MPC reconvenes. The current standoff between the executive arm of government and the legislative makes the timing of such a meeting unpredictable.

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    Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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