Inflation dips to lowest level in almost four years

Annual inflation in Nigeria stood at 11.02% in August, its lowest in almost four years, down from 11.08% in July, the National Bureau of Statistics said. Inflation has been falling steadily since May, boosting chances that the central bank could begin to loosen interest rates at its rate setting meeting next week. The price index, which peaked at 18.7 percent in January last year, has been in double digits for three years.

The central bank in March cut its benchmark interest rate in a surprise move to 13.5% from 14% as part of an attempt to stimulate growth and signal a new direction. The move was the first rate cut since November 2015. Governor Godwin Emefiele has said the bank would maintain its tight monetary stance in 2019, and sees inflation at 11.31 percent, rising to 12 percent this year before moderating.

Tuesday’s data showed that inflation fell to its lowest in three and a half years, a level last seen in February 2016. Food prices, which make up the bulk of the inflation basket, dropped to 13.17% in August from 13.39% a month earlier. Nigeria emerged from its first recession in 25 years in 2017 but growth remains fragile, although higher oil prices and recent debt sales have helped the continent’s biggest crude producer to accrue billions of dollars in foreign reserves.