Sanusi: CBN reduces inflation, targets 6 to 9 per cent

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The Central Bank of Nigeria (CBN) says it wants inflation in a variety between 6-9 per cent, lowering the regulator's previous target of keeping in single-digits.CBN's governor, Lamido Sanusi, told Reuters on Wednesday, he expects it to complete the year below that level...Inflation in Nigeria fell to a new five-year low of 8 per cent in September. Sanusi added that despite lower prices he did not think there was likely to be an interest rate cut in the near future.

Nigeria’s Inflation Slows as Effect of Subsidy Cut Falls Away

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Nigeria’s inflation rate fell to 9 percent in January as the effect of a year-earlier reduction in fuel subsidies dropped out of the calculation.

Inflation in Africa’s largest oil producer slowed from 12 percent in December, the Abuja-based National Bureau of Statistics said today in an e-mailed report. The median estimate of seven economists surveyed by Bloomberg was 9.5 percent. Prices rose 0.6 percent in the month.

The January 2012 increase in gasoline prices after President Goodluck Jonathan cut subsidies helped keep inflation above the central bank’s target of less than 10 percent throughout last year. Central bank Governor Lamido Sanusi said last month that the rate may drop close to the target, largely because of “base effects.”

Energy fuels euro inflation

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Euro zone inflation accelerated in September as energy costs soared but core prices stayed low, likely leaving the European Central Bank on track to cut interest rates soon, Reuters reported.

Consumer prices in the 17 countries sharing the euro rose 2.7 per cent year-on-year, the European Union’s statistics office Eurostat said on Friday in a first estimate that marked a rise from 2.6 per cent in August.

Markets had expected inflation to ease to 2.5 per cent.

Energy prices jumped 9.2 per cent after a 8.9 per cent rise the previous month.

Core inflation, excluding both energy and unprocessed foods, fell to its lowest level in a year of 1.7 per cent in August, the latest month for which the data has been published.

Together with recent data indicating that the euro zone economy entered a recession in the third quarter, Friday’s inflation reading kept intact expectations that the ECB will not wait long before delivering a growth-boosting rate cut.

“It seems highly likely that the ECB will take interest rates down from 0.75 per cent to 0.50 per cent in the fourth quarter,” said Howard Archer, economist at IHS Global Insight.

“While the ECB could act as soon as its October meeting next Thursday, we lean towards the view that they will probably hold off to November.”

Just 14 of 73 economists polled by Reuters this week expect the ECB to cut rates when it meets next Thursday but a majority expect the bank to have lopped off 25 basis points by the end of the year.

The ECB kept its main interest rate unchanged at a record low of 0.75 per cent at its meeting earlier this month, taking another policy-easing route by agreeing to launch a new and potentially unlimited bond-buying programme.

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Source : punchng[dot]com