Inflation rate rose marginally to 8 per cent in December from 7.9 as of November. Food inflation was also fairly stable, with prices rising to 9.2 percent, compared with 9.1 percent in November.
Inflation report released by the National Bureau of Statistics (NBS) on Tuesday stated that The headline index rose by 0.82 per cent (month-on-month) in December, higher from 0.59 percent recorded in November.
According to the Bureau, this represented the highest month-on-month increase since March 2014.
However, it stated that inflation has held in the single digit range for twenty four consecutive months, adding “the faster pace of price increases recorded by the headline index was as a result of advances in a broad array of divisions.”
The inflation figures tend to contradict expectation of analysts who feared that downward pressure on the naira would stoke inflationary pressures after the Central Bank of Nigeria (CBN) devalued the local currency by 8 percent in radical effort to halt the decline in its foreign exchange reserves.
The naira fell sharply at the end of November, and for most of December was trading well below the CBN’s target band of 160-176 against the dollar.
Meanwhile, the naira fell 1.4 percent against the U.S. dollar on Tuesday, with no fresh dollar supply and after the CBN dropped a directive that had stopped commercial lenders from taking positions in the forex market, dealers said. It closed at N183.70 to the dollar, weaker than Monday’s close of N181.20.
The central bank on Tuesday said commercial banks can hold 0.1 percent of their shareholders’ funds in foreign currency, reversing a directive enforced last month to stop lenders from dealing in hard currency on their account.
The move is intended to curb speculation in the naira, which has been hit hard in the past few months by falling oil prices.
The bank sold $249 million at N168 to the dollar at its twice-weekly auction on Monday, dealers said, higher than the $200 million it earlier offered. The apex bank has been selling the dollar at N168 since the devaluation, but the interbank market has traded lower.
