Inflation rate moderates at 15.91%

The nation’s inflation rate trend downwards to 15.91 per cent at the end of October this year, from 15.98 per cent increased recorded in September.
The steady decline in headline inflation according to National Bureau of Statistics was partly due to a lower year-on-year food inflation rate of 20.31 per cent in October from 20.32 per cent in September which reduced the impact of a year-on-year rise in core inflation to 12.14 per cent in October from 12.12 per cent in September.
The decline in food inflation could be attributed to the ongoing the harvest season.
The report showed that Of the core items, the “housing water, electricity, gas and other fuel” inflation rate slowed to 8.50 per cent in October from 8.80 per cent in September while the “clothing and footwear” inflation rate slowed to 15.64 per cent in October from 15.82 per cent in September.
However, “imported food” inflation climbed year-on-year for the third consecutive month to 15.34 per cent within the period under review from 14.83 per cent in the preceding month amid scarce forex supply to food importers while “transport” inflation rose year-on-year for the second successive month to 12.19 per cent in October from 12.00 per cent previous month amid higher energy prices – average prices per litre of major fuels PMS and AGO rose year-on-year by 0.06 per cent and 7.85 per cent to N146 and N201.96 respectively.
Meanwhile, Central Bank of Nigerias depository corporations survey showed a 0.47 per cent month-on-month (m-o-m) increase in Broad Money to N21.95 trillion in September – as Net Foreign Assets (NFA) increased m-o-m by 3.26 per cent to N10.05 trillion, thus offsetting a m-o-m 1.77% fall in Net Domestic Assets (NDA) to N11.90 trillion.
On asset creation, the increase in NDA resulted from a 0.61 per cent month-on-month rise in Net Domestic Credit (NDC) to N26.98 trillion, accompanied by a 2.58 per cent increase in Other Liabilities (net) to N15.08 trillion. A breakdown of NDC showed a 2.89 per cent m-o-m increase in Credit to the Government to N4.46 trillion which significantly outpaced the 0.11 per cent increase in Credit to the Private sector to N22.02 trillion as the public sector continued to crowd-out the private sector.
The mild growth in credit to the private sector was, in part, informed by decreasing appetite for risk assets by lenders in the face of high yield safe assets. Increase in Broad Money also followed a 0.59 per cent m-o-m decline in Quasi Money (near maturing short term financial instruments) to N11.89 trillion, accompanied by a 1.75 per cent rise in Narrow Money to N10.06 trillion of which Demand Deposits increased by 3.12 per cent to N8.63trillion.
Indicative of tightened monetary policy conditions, Reserve Money (Base Money) also increased month-on-month by 1.33 per cent to N5.56 trillion as bank reserves increased m-o-m by 4.92 per cent to N3.43 trillion while currency in circulation fell m-o-m by 4.69 per cent to N1.78 trillion.

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