Economy
July Inflation Rate to Drop to 15.96%—FSDH
By Modupe Gbadeyanka
Analysts at FSDH Research has predicted that inflation rate in July 2017 will fall to 15.96 percent from 16.10 percent recorded in June 2017.
In its latest report titled ‘Inflation Watch’, FSDH noted that “although the inflation rate (year-on-year) dropped consistently between January and June 2017 due to the impact of the base effect in the prior year, we note that inflationary pressure persists.”
It said the expected decrease in the inflation rate is largely attributed to the downward movement in some categories of non-food items in the Consumer Price Index (CPI) basket, as well as decreases in some major food prices.
“Based on the data release calendar on the website of the National Bureau of Statistics (NBS), we expect the NBS to release the inflation rate for the month of July 2017 on August 16, 2017,” it said.
The monthly Food Price Index (FPI) that the Food and Agriculture Organization (FAO) released yesterday indicates that the Index averaged 179 points in July 2017, 2.24 percent higher than the June value, and the third consecutive month of increase.
According to the FAO, the increase in the value of the Index in July was majorly due to the supply constraints and currency movements in the prices of items such as cereals, sugar and dairy.
The sharp increase in the FAO Sugar Price Index (up 5.19 percent) from June 2017 is mainly attributable to the strong appreciation of the Brazilian Real.
The FAO Cereal Price Index was up 5.14 percent in July 2017 mainly due to the appreciation in the price of wheat and rice.
The FAO Dairy Price Index appreciated by 3.63 percent in July 2017. The prices of most dairy products which include whole milk powders, cheese and butter appreciated during the period.
Meanwhile, the price of skimmed milk powder declined. On the flip side, the FAO Meat Index was down by 0.08 percent largely unchanged from June figure.
The price increases in ovine meat was offset by the downward price movement in bovine, pig and poultry. The FAO Vegetable Oil Price Index was down by 1.10 percent, driven by falling quotations for palm oil.
FSDH said its analysis indicates that the value of the Naira appreciated at both the inter-bank and parallel markets.
The Naira gained 0.08 percent to close at N305.65/$ at the inter-bank market while it gained 1.09 percent to close at N367/$ at the parallel market at the end of July 2017.
The appreciation in the value of the Naira should reduce the pass-through effect of the increase in the prices of food at the international market on domestic prices.
“The prices of most of the food items we monitored in July 2017 moderated while a few items recorded price appreciation.
“The movement in the prices of food items during the month resulted in 1.25 percent increase in our
Food and Non-Alcoholic Index to 248.20 points. We noticed increase in the prices of Housing, Water, Electricity, Gas & Other Fuels divisions between June 2017 and July 2017.
“Our model indicates that the general price movements in the consumer goods and services in July 2017 would increase the Composite Consumer Price Index (CCPI) to 236.83 points, representing a month-on-month increase of 1.13 percent.
“We estimate that the increase in the CCPI in July 2017 would produce an inflation rate of 15.96 percent lower than the 16.10 percent recorded in June 2017,” the report said.
By Adedapo Adesanya
The Naira ended its recent losing streak with a N5.06 or 0.37 per cent appreciation on Wednesday, May 13, in the Nigerian Autonomous Foreign Exchange Market (NAFEX), trading at N1,370.56/$1 compared with the previous day’s N1,375.62/$1.
In the same vein, the Nigerian Naira appreciated against the Pound Sterling in the official market yesterday by N21.43 to N1,87/£1 from N1,874.42/£1, and gained N16.12 against the Euro to close at N1,605.19/€1 versus N1,621.31/€1.
However, at the GTBank FX desk, it lost N8 against the greenback at midweek to sell at N1,383/$1 compared with the preceding session’s N1,375/$1, and at the parallel market, it remained unchanged at N1,385/$1.
The improvement in the value of the Naira comes as Nigeria’s external reserves, which provide the Central Bank of Nigeria (CBN) with buffers to support the Naira and meet external obligations, also recorded a fresh accretion.
Data published on the apex bank’s website showed that reserves rose by about $150 million or 0.2 per cent to $48.48 billion as of May 12, 2026, from $48.33 billion recorded on May 5, 2026.
Interbank turnover also climbed significantly by 75.31 per cent to $130.55 million on Wednesday compared to $74.47 million recorded the previous day. At the same time, the volume of transactions rose by 25 per cent to 130 deals on Wednesday from 104 deals recorded on Tuesday.
A look at the cryptocurrency market indicated that inflation surprises and renewed geopolitical tension over Taiwan weakened risk sentiment.
The sell pressure built around the Trump-Xi summit in Beijing, the first visit to China by a sitting US president in nearly a decade. Mr Xi pressed Mr Trump on Taiwan in their first meeting at the Great Hall of the People, warning of a potential “collision or even clashes” if the issue is mishandled.
China’s readout of Mr Xi’s remarks appeared to be released before the meeting had concluded, pushing the self-ruled island into the spotlight and rattling risk sentiment globally.
Solana (SOL) crashed by 4.3 per cent to $91.12, Cardano (ADA) depreciated by 2.6 per cent to $0.2656, Ripple (XRP) slumped by 1.6 per cent to $1.43, Bitcoin (BTC) declined by 1.5 per cent to $79,773.30, Ethereum (ETH) tumbled by 1.3 per cent to $2,266.06, and Binance Coin (BNB) slumped by 1.2 per cent to $669.40.
But Dogecoin (DOGE) appreciated by 2.5 per cent to $0.1146, and TRON (TRX) improved by 0.4 per cent to $0.3505, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited cemented its position in the green territory on Wednesday with a marginal 0.04 per cent rise.
This was buoyed by sustained buying pressure on energy equities despite selling pressure on financial stocks, according to data from Customs Street.
The insurance counter was down by 0.73 per cent yesterday, and the banking index shed 0.70 per cent. These losses were offset by gains in the three other key sectors of the bourse, with the energy segment rising by 3.37 per cent. The consumer goods space appreciated by 1.94 per cent, and the industrial goods industry expanded by 0.43 per cent.
At the close of business, the All-Share Index (ASI) increased by 349.96 points to 252,508.19 points from 252,158.23 points, and the market capitalisation grew by N226 billion to N161.839 trillion from N161.613 trillion.
A total of 42 stocks appreciated during the session, while 29 stocks depreciated, implying a positive market breadth index and strong investor sentiment.
The quartet of CWG, DAAR Communications, Fidson, and Livestock Feeds gained 10.00 per cent each to sell for N23.10, N1.87, N113.00, and N10.45, respectively, while Berger Paints rose by 9.97 per cent to N140.10.
On the flip side, NCR Nigeria lost 10.00 per cent to close at N179.10, Zichis decreased by 9.99 per cent to N36.32, First Holdco shed 9.87 per cent to trade at N71.20, Neimeth dropped 9.66 per cent to N172.00, and Eterna eased by 9.59 per cent to N33.00.
At midweek, investors transacted 1.9 billion shares for N118.1 billion in 76,557 deals compared with the 2.0 billion shares worth N87.7 billion traded in 80,888 deals on Tuesday.
This showed that the value of transactions surged by 34.66 per cent, the volume of trades went down by 5.00 per cent, and the number of deals declined by 5.35 per cent.
By Adedapo Adesanya
Oil prices settled lower on Wednesday as investors worried about possible US interest rate hikes amid anticipation of the outcomes of a meeting between US President Donald Trump and China’s Xi Jinping.
Brent crude lost $2.14 or 2 per cent to trade at $105.63 a barrel, and the US West Texas Intermediate crude futures fell by $1.16 or 1.14 per cent to $101.02 per barrel.
Boston Federal Reserve President Susan Collins said on Wednesday the US central bank may need to raise interest rates if inflation pressures do not ease, a sign that the war has begun to weigh on the American economy.
Higher oil prices have pushed up fuel costs, and economists expect to see effects in the months ahead.
Producer prices in the US posted their biggest increase in four years in April, boosted by soaring costs for goods and services, the latest sign of accelerating inflation during the war with Iran. Also in the same month, US consumer prices rose sharply for a second straight month, producing the largest annual increase in inflation in nearly three years.
Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand.
President Trump landed in Beijing on Wednesday, a day after saying he did not think he would need China’s help to end the war. The American President is scheduled to meet Mr Xi on Thursday and Friday.
This comes amid prospects for a lasting peace deal with Iran weakened, and the Middle East country tightened its grip over the Strait of Hormuz.
China is the biggest buyer of Iranian oil despite pressure from the Trump administration.
The Organisation of the Petroleum Exporting Countries (OPEC) on Wednesday lowered its forecast for world oil demand growth in 2026. The International Energy Agency (IEA) said global oil supply would not meet total demand this year as the war wreaks havoc on Middle East production.
Crude oil inventories in the US decreased by 4.3 million barrels during the week ending May 8, according to data from the US Energy Information Administration (EIA) released on Wednesday.
Iran’s Foreign Minister, Mr Abbas Araqchi, said on Wednesday that Kuwait had attacked an Iranian boat and detained four Iranian citizens in the Gulf. He added that Iran demands their release and reserves the right to respond, raising fresh tensions in the region.
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