Analysts at the Financial Derivatives company, FDC are forecasting that Nigeria’s headline inflation will decline for the second month to 16.4%.
The likely drop in the rate of inflation is being attributed to further waning of the 2016 base year effects.
The government’s office of statistics NBS is expected to release the official inflation data next week.
According to a note put out Friday by FDC, “the reasons for a moderation in the price level in March are not far-fetched.
“February/March 2017 was the period when the CBN’s aggressive intervention in the forex market forced a major appreciation in the Naira (13.5% to N392) and has fed mildly into retail prices.
“However, more significantly is the steep decline in the price of diesel from a peak of N260 to N195 at the wholesale level.”
There could be better news next month for Nigeria’s inflation trend as the 90-day transmission lag effect of the current CBN’s forex policy which has brightened the prospect of the local currency and cut cost as well as manufacturer’s inventory cycle “may have delayed some of the pass-through effect of raw material and finished goods cost reduction.” FDC said
The full impact of these policies will become manifest in the months of April and May.