Economy

Inflation to Ease to 11.31% in February—FSDH

Published

7 years ago

13/03/2019

By Modupe Gbadeyanka

The research arm of Lagos-based financial institution, FSDH Merchant Bank, has said it expects inflation rate for the month of February 2019 to moderate to 11.31 percent from 11.37 percent recorded a month earlier.

In its Inflation Watch report, FSDH Research said the drop in inflation will defy electioneering spending, which was earlier predicted to contribute to a rise in the head inflation.

The National Bureau of Statistics (NBS) will release the inflation figure for the month of February on Friday, March 15, 2019, well ahead of the second Monetary Policy Committee (MPC) meeting of this year scheduled for March 25-26, 2019.

On February 23, 2019, Nigeria held the presidential and National Assembly elections, while on March 9, 2019, the governorship and state houses of assembly polls took place.

“If the inflation rate drops, can we expect a further drop in interest rates (yields) on fixed income securities? Or, can we expect members of the MPC of the Central Bank of Nigeria (CBN) to clap their hands for achieving stability in domestic prices and reduce policy rates?” the firm asked, saying it believes inflation rate in double digits, “as we predict it in 2019 and through 2022, may not justify a reduction in the monetary policy rates.”

“We believe there are many other issues that Nigerian economic managers need to address before the Nigerian economy can enjoy a low, as many people suggest, single digit interest rate,” the report said.

It further noted that, “When there is a general increase in the prices of goods and services, there is the tendency for suppliers (producers) to be happy as it should increase their profit.

“However, an increase in the general prices of goods is not good for consumers as it reduces their buying powers: the same amount of money cannot buy the same quantity of goods as it previously could.

“On the other hand, when there is a persistent decrease in the prices of goods and services, the profit of the suppliers (producers) will drop while the consumers’ ability to buy goods increases as a certain amount of money is enough to purchase more units of goods.

“Therefore, a balance in general prices of goods is needed to encourage both producers and consumers. This is why the CBN regularly modifies interest rate and yields to achieve a target range of inflation rate, currently put at 6 percent to 9 percent.”

FSDH Research the price monitor it conducted on certain food and non-food items in February showed that most prices increased at a slower rate in February than in January.

It said the slower pace of increase was an indication of an expected drop in the inflation rate in February.

“Our analysis shows the movements in the international food prices did not exert upward pressure on local prices in February.

“The report published by the Food and Agriculture Organization (FAO) of the United Nations for the month of February 2019 shows that food prices such as sugar, milk, butter, cheese, meat, oils, rice, wheat and maize increased on the international market.

“However, the value of the Naira strengthened against the Dollar during the month. The appreciation recorded in the Naira eliminated the impact of the increase in the international food prices on local prices.

“Although the inflation rate is trending downwards, FSDH Research stresses that certain economic realities may not guarantee a continued downward trend. The key limiting factors to a continued drop in the inflation rate are the need for adjustments to the current pricing regime of Petroleum Motor Spirit (PMS) and the electricity tariff.

“If these adjustments are carried out, government will save a certain amount of money that could and should be redirected to fund other critical sectors of the economy such as healthcare, education, security and infrastructure development.

“If this was the case, we would expect these adjustments to attract investments into those sectors. Although such adjustments may shift the inflation curve from its current level, the good news is that it may not go higher than 13 percent level.

“It is important to note that, if the Federal Government of Nigeria (FGN) implements these pricing adjustments, FSDH Research expects the average inflation rate of 2019 to be around the same average inflation rate of 2018. Meanwhile, the inflation rate would be substantially lower than it was in 2016 and 2017.

“Therefore, it may be better for Nigeria to remove ‘subsidies’ in both the energy and power sectors. We believe it would be a case of temporary pains and permanent gains.”

Economy

NASD Market Falls 1.18% to Extend Losing Streak

Published

1 day ago

14/03/2026

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south for the fourth consecutive session after it shed 1.18 per cent on Friday, March 13.

The unlisted securities market recorded a loss despite closing without a price decliner, and ending with two price gainers led by Geo Fluids Plc, which gained 1o Kobo to sell at N3.10 per share compared with the previous day’s N3.00 per share. Industrial and General Insurance (IGI) Plc appreciated during the session by 2 Kobo to trade at 54 Kobo per unit versus Thursday’s closing price of 52 Kobo per unit.

When the market closed for the day, the market capitalisation lost N29.83 billion to close at N2.489 trillion compared with the N2.519 trillion it finished a day earlier, and the NASD Unlisted Security Index (NSI) crashed by 49.84 points to 4,160.46 points from 4,210.31 points.

Market activity improved yesterday, as the volume of transactions rose 179.5 per cent to 10.4 million units from 3.7 million units, but the value of trades declined by 68.4 per cent to N29.9 million from N95.0 million, while the number of deals weakened by 11.5 per cent to 46 deals from 52 deals.

Central Securities Clearing Systems (CSCS) Plc remained the most active stock by value on a year-to-date basis with 38.4 million units worth N2.4 billion, Okitipupa Plc followed with 6.4 million units traded at N1.1 billion, and FrieslandCampina Wamco Nigeria Plc transacted 6.3 million units for N584.3 million.

Resourcery Plc ended the trading session as the most traded stock by volume on a year-to-date basis with 1.1 billion units valued at N415.6 million, trailed by Geo-Fluids Plc with 130.8 million units valued at N504.5 million, and CSCS Plc with 38.4 million units worth N2.4 billion.

Economy

Naira Trades N1,366/$1 at Official Market, N1,400/$1 at Black Market

Published

1 day ago

14/03/2026

Adedapo Adesanya

By Adedapo Adesanya

The Naira continued to claw back some gains against the Dollar in the different segments of the foreign exchange (FX) market, as its value was strengthened on Friday.

In the black market, it gained N10 against the United States Dollar yesterday to close at N1,400/$1 compared with the preceding day’s rate of N1,410/$1, and at the GTBank forex counter, it chalked up N6 to close at N1,385/$1, in contrast to the N1,391/$1 it was traded a day earlier.

Similarly, in the Nigerian Autonomous Foreign Exchange Market (NAFEX), it appreciated against the greenback during the session by N5.28 or 0.38 per cent to quote at N1,366.23/$1 versus Thursday’s closing price of N1,371.51/$1.

It also improved its value against the Pound Sterling in the official market on Friday by N21.81 to settle at N1,812.99/£1 compared with the previous day’s N1,834.80/£1, and gained N13.86 against the Euro to sell at N1,568.03/€1 versus N1,581.89/€1.

Pressure eased further on the FX market as the Central Bank of Nigeria (CBN) continued interventionist operations this week, selling Dollars to banks to boost liquidity after a $500 million boost last week.

This was complemented by inflows from foreign investors, exporters and non-bank corporates, among others, while Nigeria’s gross external reserves remained above $50 billion, the highest since 2009.

The Governor of the apex bank, Mr Yemi Cardoso, also eased fears of a Naira devaluation, saying the country’s financial system has been strengthened by reforms.

Regardless, external pressure looms as the US Dollar strengthened globally due to its war with Iran, now ongoing for three weeks.

Meanwhile, the cryptocurrency market was largely down as traders and investors continue to align with current realities.

The market is adapting to the conflict in real time. Early in the war, every headline produced an outsized reaction because nobody could price the tail risk. Now, traders have a framework where strikes happen, oil spikes and bitcoin dips only to recover again.

Cardano (ADA) depreciated by 3.8 per cent to $0.2623, Dogecoin (DOGE) lost 1.7 per cent to finish at $0.0948, Ripple (XRP) slumped 1.5 per cent to $1.39, Solana (SOL) dropped 1.4 per cent to sell for $87.33, Binance Coin (BNB) went down by 1.3 per cent to $653.58, Bitcoin (BTC) declined by 1.1 per cent to $70,670.63, and Ethereum (ETH) decreased by 0.9 per cent to $2,078.78.

However, TRON (TRX) appreciated by 1.7 per cent to $0.2941, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.

Economy

Oil Stays Above $100 as Strait of Hormuz Traffic Stalls

Published

1 day ago

14/03/2026

Adedapo Adesanya

By Adedapo Adesanya

The price of the major crude oil grade, Brent crude oil, closed above $100 on Friday for the second consecutive session, as the Iran war heads toward its third week, with oil tanker traffic through the Strait of Hormuz still effectively at a standstill.

It gained 2.67 per cent or $2.68 during the trading day to close at $103.14 per barrel, while the US West Texas Intermediate (WTI) crude oil grade appreciated by 3.11 per cent or $2.98 to settle at $98.71 per barrel.

Brent futures were up about 10 per cent for the week following the 27 per cent rise seen last week, which marked the biggest weekly gain in oil prices since the COVID-19 pandemic in 2020. WTI futures, which saw their best week since 1983 last week, ended the week more than 8 per cent higher.

US President Donald Trump said American forces launched a major bombing raid on Iran’s strategic Kharg Island, targeting military facilities on the key Persian Gulf outpost while warning Iran that its vital oil infrastructure could be destroyed if shipping in the Strait of Hormuz is disrupted.

The terminal accounts for roughly 90 per cent of Iranian crude shipments, loading millions of barrels per day onto tankers bound largely for Asian markets.

The US and Israel’s strikes in the conflict have largely targeted Iranian military and nuclear infrastructure. Oil facilities elsewhere in Iran have been hit, but Kharg’s massive storage tanks, jetties, and pipelines had remained untouched until the latest strike.

Iran’s new supreme leader, Mojtaba Khamenei, vowed to keep fighting in a message delivered via state television.

There have been a number of attacks on foreign ships in or near the Strait, feeding into concerns that a prolonged war could translate to a global economic shock.

Prices are rising despite the US and its allies rolling out some measures to keep a lid on energy costs.

The International Energy Agency (IEA) has agreed to release 400 million stockpiled barrels, the largest such action in history.

The US has issued a 30-day waiver for India to purchase sanctioned oil from Russia. President Donald Trump is considering loosening rules under the Jones Act that require American ships to transport goods between domestic ports, including oil and gas, in an effort to lower costs.

Traders are continuing to monitor developments in the Middle East.