Published On: Wed, Nov 15th, 2017

Time is ripe for rates cut, says Rewane as inflation slows further in Oct.

FELIX OLOYEDE

Prof. Yemi Kale, DG, National Bureau of Statistics

This is the appropriate time for the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to cut benchmark monetary rates after inflation rate slows down for the ninth consecutive time in October, said Mr Bismarck Rewane, Managing Director, Financial Derivatives.

The National Bureau of Statistics on Tuesday released Consumer Price Index (CPI), which measures inflation and it showed that inflation rate lower by 0.07 percent points to 15.91 percent (year-on-year) from 15.98 per cent recorded in September. But on a month-on-month basis, inflation accelerated marginally 0.76 percent in October 2017, 0.02 percent points lower from the rate of 0.78percent recorded in September.

The MPC is scheduled to meet for the last time for the year on Monday and Tuesday in Abuja. Pundits hope the latest decline in inflation rate would influence to lower interest rate, which has been pegged at 14 per cent since August 2016, despite outcry from the organized private sector for the reduction of benchmark rates during the 15 months the country wallowed in recession. But the apex bank argued that this would worsen the economy and discourage Foreign Direct Investments (FDIs). But the CBN governor, Godwin Emefiele recently hinted that interest rate would begin to drop in 2018.

“The good news is that inflation has been down to 15.91 per cent, which has been forecast and it was accurate. It has been consistent in the accelerating path. I hope it will influence the out of the MPC meeting on Monday and Tuesday,” noted Rewane. If the GDP numbers come out on Monday and there is further improvement, MPC will have no reason not to lower rates, he also argued while speaking on Channels TV’s Business Morning Show on Tuesday.

The data from NBS indicates that urban inflation was up 16.19 percent (year-on-year) in October2017,   0.01 percent point higher than 16.18 percent recorded in September. On the other hand, rural inflation slowed to 15.67 percent in October compared to 15.81 percent in September.

“Consumer Price Index Food Index High food price and food price pressure continued into September though generally at a slower pace. The Food Index increased by 20.31 percent (year-on-year) in October, down marginally by 0.01 percent points from the rate recorded in September (20.32 percent),” the report stated.

The Financial Derivatives boss explained that food inflation has been high because of increased rate of food smuggling out of the country, postulating that cost of food stuffs is bound to drop due to the current harvest season.

The Central Bank targets 6-9 per cent inflation rate, while the federal government is aiming for 12 per cent for 2018.

© 2017, Hallmarknews. All rights reserved. Reference and link to this site is required if you wish to reuse any article.

Reactions from Facebook

comments and opinions

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Most Shared

Recent posts

  • Oshiomhole tackles Saraki in fight to finish

      By OBINNA EZUGWU Adams Oshiomhole, National Chairman of the All Progressive Congress (APC), has since made the removal of Senate President, Dr. Abubakar Bukola Saraki from office as Senate helmsman his major preoccupation. But his plots in this regard, as well as his hard-line stance on otherwise delicate issues, are not only threatening APC […]

  • Financial crisis in power sector endanger banks

    By AYOOLA OLAOLUWA   Except prompt actions are urgently taken, the banking sector could face another major financial crisis, no thanks to their heavy exposure to distressed power firms operating in the country. According to concerned experts in the power industry, a large chunk of the loans to power firms might be impaired likely throw […]

  • NSE: Investors devise survival strategies

    By TESLIM SHITTA-BEY As the Nigerian All Shares Index (ASI) scrapes past a downward slanting tunnel, a growing number of investors in the local stock market have started to rebalance their equity portfolios. Investors who have largely been exposed to fast moving consumer goods industries (FMCG’s) are beginning to redirect scarce cash to banking sector […]

  • Interim Dividends: Naira rain at GT Bank

    By OKEY ONYENWEAKU With its year on year yield at 9.98 per cent, GT Bank Plc has become the toast of local investors as its stock price bounced from N24 per share at the start of 2017 to a more recent price of N38. Audited accounts for the bank released last week saw gross earnings […]

  • Python Dance 3: Uwazurike condemns planned military operation in the South East as unnecessary intimidation

    By OBINNA EZUGWU Senior lawyer and president emeritus of Igbo think tank group, Aka Ikenga, Chief Goddy Uwazurike has condemned the planned military operation in the South East zone, Python Dance 3, as unnecessary and an attempt to intimidate the people of the zone. Chief Uwazurike who registered his displeasure over the planned military exercise […]

  • Stocks: Oil sector stocks defy economic downturn in 2nd Quarter

    By TESLIM SHITTA-BEY Despite a mild economic recovery in 2018, Oil sector stocks listed on the main board of Nigeria’s stock exchange are only recently shaking off the anguish of last year’s sector melt down. Indeed of the six leading Oil-related companies that have published 2nd quarter results in 2018, Seplat beat the blues by […]

  • Bears clobber Bulls in major rout

    By FELIX OLOYEDE After a stellar 2017, The Nigerian Stock Exchange (NSE) has collapsed to becoming the fourth worst performing equity market on the global over the last six months as political pressure and a United States of America (USA) interest rate hike intensify investor’s apathy. The local bourse plunged 18.24 per cent over the […]

  • PDP Coalition: anxiety mounts over flag bearer

    By OBINNA EZUGWU With the recent defection of Senate President, Abubakar Bukola Saraki and Sokoto State governor, Aminu Waziri Tambuwal to the People’s Democratic Party (PDP), the list of anticipated presidential hopefuls under the main opposition party’s platform is complete. But it now faces an imminent danger of being torn apart by the collision of […]

  • H1: Zenith Bank waves the magic wand

    By OKEY ONYENWEAKU Despite weak economic tailwinds, Zenith Bank Plc is fashioning a path to stronger corporate earnings in the year 2018. The bank’s management has recently struck a pact with lower operating expenses relative income while putting a spear through the heart of nonperforming loans (NPLs) as the banks half year (H1) 2018 results […]

  • I will disclose my 2019 presidential ambition in due time – Saraki

    By OBINNA EZUGWU Senate President, Abubakar Bukola Saraki has said he will tell Nigerians whether or not he will run for president in 2019 when the time is ripe. Saraki who stated this while responding to questions from journalists during his world press conference earlier on Wednesday in Abuja, following Tuesday’s invasion of the National […]

  • 2019 election budget: NASS leadership meets INEC in Abuja

    The leadership of the National Assembly (NASS) is currently in a meeting with the Chairman of Independent National Electoral Commission (INEC), Prof. Mahmood Yakubu. The meeting is a special hearing on INEC’s budget for the 2019 elections. The ongoing meeting was also tweeted via INEC’s official handle, @inecnigeria, where it was stated that the meeting […]

  • At last, Senator Akpabio dumps PDP for APC

    Former Minority Leader of the Senate, Senator Godswill Akpabio, on Wednesday officially decamped from the Peoples Democratic Party (PDP) to the All Progressives Congress (APC). Akpabio was welcomed to the ruling party at a rally organised for him by the Akwa Ibom State chapter of the APC. Some of the senators in attendance were Abdullahi […]

  • Sack of DSS boss: Osinbajo has made it clear invasion order didn’t come from him – Uwazurike

    Senior lawyer and president emeritus of Igbo think tank group, Aka Ikenga, Chief Goddy Uwazurike has commended Nigeria’s Acting President, Professor Yemi Osinbajo for summoning courage to sack the Director General of the DSS, Lawal Daura over Tuesday’s invasion of the National Assembly, noting that the Acting President, has, by his action, made it clear […]

  • NASS siege: Acting President, Osinbajo sacks DSS boss, Lawal Daura

    Acting President, Yemi Osinbajo, has sacked the Director-General of the Department of State Service (DSS), Lawal Daura following the siege on the National Assembly by security operatives on Tuesday. Osinbajo’s spokesman, Laolu Akande, disclosed Daura’s sacking on his Twitter handle, @akandeoj. He wrote, “AgP Yemi Osinbajo has directed the termination of the appointment of the […]

  • We want to restore Abia to its deserved glory—Otti

    Okey Onyenweaku Dr. Alex Otti, a forefront contestant for the post of Governor of Abia State, yesterday Sunday August 5, 2018 said in Lagos that he was gunning for position of Governor of the State to change the story of the Igbo man in Nigeria and perhaps the world. Otti, who met with friends at […]

  • Stocks: Investors scout for hidden value as market turns bearish

    By TESLIM SHITTA-BEY As Nigeria’s Stock Exchange’s All Shares Index (ASI) dips below a year-to-date yield of zero per cent (-4.58 per cent at the close of the previous week’s business on Friday), a growing number of investors have put gun sights on emerging hidden value opportunities in the market. So far the results have […]