Nigerian Inflation Surprise Puts Another Rate Hike in Play
Nigerian inflation quickened more than expected, putting another interest-rate hike in play.
Consumer prices rose 33.9% year-on-year in October, compared with 32.7% in September, the National Bureau of Statistics said in a statement on its website on Friday. That exceeded the median estimate of seven economists in a Bloomberg survey of 33.4%.
The data will affirm the central bank’s concerns that the recent pickup in inflation is “a trend, albeit a short one, not a blip,” Yvonne Mhango, Africa Economist for Bloomberg Economics, said before the release of the data. It will likely remain “steadfast in hiking rates again” on Nov. 26, “in keeping with its plan to restore positive real rates.”
Monetary policymakers have hiked rates by 850 basis points this year to 27.25%. Governor Olayemi Cardoso has repeatedly said the central bank remains resolute in its effort to rein in price pressures and achieve a positive inflation-adjusted interest rate to attract investment into the economy, which would help support the naira.
The Nigerian currency has depreciated 45% this year, the world’s third-worst performer after the Lebanese pound and the Ethiopian birr.
Higher food prices contributed to the acceleration. Food inflation quickened to 39% in October, from 37.8% a month prior and core price growth, which excludes agricultural produces and energy, accelerated to 28% from 27.4%.
