Economy

June Inflation to Drop to 15.64% from 16.25%—FSDH

Published

8 years ago

06/07/2017

By Dipo Olowookere

A new report by FSDH Research has predicted that inflation rate for the month of June 2017 will drop further to 15.64 percent from 16.25 percent in the month of May.

Last month, the National Bureau of Statistics (NBS) revealed that inflation for May deflated to 16.25 percent from 17.24 percent in April 2017.

FSDH Research, in its report released on Thursday titled Inflation Watch, it observed that the increase in the price of food items moderated in the month of June compared with May 2017.

“We also observed increases in some divisions that contribute to the Core Sub-Index, with the highest price observed in the clothing and footwear divisions.

“Based on the data release calendar on the National Bureau of Statistics (NBS) website, we expect the NBS to release the inflation rate for the month of June 2017 on July 17, 2017,” the report said.

It was noted that the monthly Food Price Index (FPI) that the Food and Agriculture Organization (FAO) released today shows that the Index advanced further in June 2017.

The Index averaged 175.2 points, 1.43 percent higher than the revised value for May 2017, and 6.89% higher than the June 2016 figure. Movement in the food prices were in varying directions. Dairy, cereal and meat prices were mostly responsible for the uptick in the value of the Index while sugar and oil prices depreciated.

The FAO Dairy Price Index appreciated by 8.26 percent in June 2017. Prices of all dairy products which include milk powders, cheese and butter appreciated significantly during the period.

The FAO Cereal Price Index gained 4.21 percent from the previous month, representing a one-year high. Wheat and rice prices firmed up and were primarily responsible for the uptick in the value of the Index.

The FAO Meat Index was up by 1.85 percent on the backdrop of generally higher prices as import demand strengthened.

On the flip side, the FAO Vegetable Oil Price Index was down by 3.88 percent, driven by falling quotations for both palm and soy oils.

Good production prospects and bumper harvests contributed to the fall in prices. The Sugar Price Index dropped by 13.45 percent in June 2017 on the heels of weak global import demand and improved supply conditions in the main sugar producing regions in Brazil.

In addition, analysts at FSDH Research said, “Our analysis indicates that the value of the Naira depreciated at the inter-bank market while it appreciated at the parallel market.”

The Naira lost 0.16 percent to close at N305.90/$ at the inter-bank market while it gained 2.96 percent to close at N371/$ at the parallel market at the end of June 2017. The appreciation of the Naira in the parallel market is expected to counter the effect of the rising prices of food at the international market.

Hence, this should lead to a moderation in the pass through effect of imported prices on consumer goods in Nigeria, the report noted.

It pointed out that there was a general price increase in most of the food items that FSDH Research monitored in June 2017.

The prices of onions, yam, tomatoes, garri, sweet potatoes, palm oil, vegetable oil, Irish potatoes and rice were up by 33.89 percent, 24.6 percent, 11.11 percent, 6.67 percent, 4.76 percent, 4.62 percent, 3.03 percent, 2.96 percent and 2.69 percent respectively.

Meanwhile, the prices of beans, meat and fish were stable. 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 243.34 points.

“We also noticed increase in the prices of Housing, Water, Electricity, Gas & Other Fuels divisions between May 2017 and June 2017.

“Our model indicates that the general price movements in the consumer goods and services in June 2017 would increase the Composite Consumer Price Index (CCPI) to 233.25 points, representing a month-on-month increase of 1.18 percent.

“We estimate that the increase in the CCPI in June 2017 would produce an inflation rate of 15.64 percent lower than the 16.25 percent recorded in May 2017,” the report predicted.

Economy

Wale Edun Rules Out IMF Loan for Nigeria

Published

4 hours ago

24/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, has said Nigeria may not run to the International Monetary Fund (IMF) for any loan.

He disclosed this in a chat with Arise Television on the sidelines of the ongoing World Economic Forum (WEF) in Davos, Switzerland.

The Minister affirmed that Nigeria has no reason to approach the global lender, adding that the nation is currently relying on relatively cheaper borrowing sources from the World Bank and the African Development Bank (AfDB).

He also argued that Nigeria does not have a balance of payments problem and therefore will not need the short-term financing intervention by the Bretton Wood institution.

“I can imagine the headlines if you saw a situation whereby you were saying Nigeria approaches the IMF for funding. But the reality is that, of course, as a developing country, requiring investment, funds for the government, and investment in key infrastructure to improve the enabling environment for business, we do need funds, and we have the need to borrow.

“We have relied on relatively cheap funding from the multilateral, from the World Bank, from AFDB, and the whole spectrum of funding has been used.”

He also said that the country will tap a range of instruments to help finance this year’s budget deficit and improve the economy.

“We have relied on Nigerian savings by convincing them of the macroeconomic plan of the president, and what it holds in terms of the prospects for growth of the economy and business, and improvement of the business environment.

“Of course, we have approached the Euro bond market, which is, of course, the commercial end of financing. So we’ve done that whole spectrum. When it comes to IMF financing, typically financing from the IMF is to help with short-term balance of payments issues and crises.

“In the case of Nigeria, we have a positive trade balance. We have a positive current account balance. Our reserves are growing. The Governor of the Central Bank recently announced that we had achieved upwards of $10 billion improvement and increase in the reserves.

“We need to use equity. We need to rely on crowding in the savings, particularly of the private sector in Nigeria and the private sector around the world in the form of foreign direct investment. We have to remember that at this time, we have had significant gains in terms of improving the economic environment,” Mr Edun stated.

Economy

NASD OTC Exchange Rises 0.33%

Published

11 hours ago

24/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange rose further by 0.33 per cent on Thursday, January 23, as appetite for unlisted stocks continued to grow.

During the trading session, the value of the bourse went up by N7.6 billion to N1.767 trillion from the N1.76 trillion it closed in the preceding session, as the NASD Unlisted Security Index (NSI) made an additional 10.33 points to wrap the trading day at 3,120.3 points compared with the 3,09.80 points recorded at the midweek session.

Business Post reports that the share price of Okitipupa Plc increased on Thursday by N4.35 to end the day at N47.90 per unit compared with the previous day’s N43.55 per unit, and Food Concepts Plc gained 14 Kobo to settle at N1.74 per share, in contrast to the preceding day’s N1.60 per share.

On the flip side, Impresit Bakolori Plc suffered a decline of 10 Kobo yesterday to trade at 95 Kobo per unit versus Wednesday’s closing price of N1.05 per unit.

When the exchange closed for the session, the volume of securities bought and sold by investors went up by 70,008 per cent to 407.4 million units from the 581,160 units transacted a day earlier.

Equally, the value of shares traded during the session jumped by 16,665.9 per cent to N391.2 million from the N2.3 million recorded at midweek, and the number of deals increased by 65 per cent to 30 deals from the 20 deals posted on Wednesday.

Impresit Bakolori Plc topped the activity chart as the most active stock by value (year-to-date) with 406.5 million units worth N386.1 million, followed by FrieslandCampina Wamco Nigeria Plc with 4.3 million units valued at N170.4 million, and Geo-Fluids Plc with 9.1 million units sold for N44.3 million.

However, Impresit Bakolori Plc snatched the top spot as most active stock by volume (year-to-date) with 406.5 million units worth N386.1 million, as Industrial and General Insurance (IGI) Plc dropped to second position for selling 26.3 million units sold for N6.3 million, and Geo-Fluids Plc occupied third with 9.2 million units valued at N44.3 million.

Economy

Naira Firms to N1,548/$1 at Official Market, Tumbles at Black Market

Published

13 hours ago

24/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira recovered about 0.26 per cent or N3.99 against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, January 23 after coming under pressure in recent times.

During the session, the exchange rate of the local currency to its American counterpart closed at N1,548.59/$1 in the official market compared with the previous day’s N1,552.58/$1.

Also, against the Pound Sterling, the domestic currency gained N3.32 yesterday to trade at N1,912.21/£1 compared with Wednesday’s value of N1,915.53/£1 and on the Euro, it improved by N3.82 to sell for N1,617.72/€1 versus N1,613.89/€1.

The forex market may be reacting positively to news that the Central Bank of Nigeria (CBN) would launch a FX Code, which will serve as a guideline to the banking industry to promote ethical conduct of Authorised Dealers in the Nigerian FX market, next week.

The code will further reduce speculative activities, eliminate market distortions, and give the CBN improved oversight capabilities to effectively regulate the market.

The bank noted that authorised dealers would subsequently conduct all FX transactions in the interbank FX market on the EFEMS approved by the apex bank where transactions will be reflected immediately.

However, in the black market segment, the Nigerian Naira lost N5 against the greenback during the session to quote at N1,665/$1, in contrast to midweek’s rate of N1,660/$1.

As for the cryptocurrency market, it was lively yesterday as attention is increasingly centered on potential policy developments under the government of President Donald Trump of the US.

On Thursday, President Trump signed an executive order to ban the digital dollar and promote crypto and AI innovation in the country.

Meanwhile, the US data released recently showed the “all tenant rent” index, which leads the shelter inflation in the Consumer Price Index (CPI), rose at a slower pace last quarter. That has raised hopes that the US Federal Reserve will walk back on its hawkish December rate forecasts.

These helped Ethereum (ETH) gain 5.4 per cent on Thursday to sell at $3,394.79, Solana (SOL) appreciated by 4.4 per cent to $260.86, Cardano (ADA) jumped by 2.9 per cent to $1.00, and Litecoin (LTC) expanded by 2.6 per cent to $116.78.

Further, Bitcoin (BTC) rose by 2.1 per cent to $1o4,978.31, Ripple (XRP) leapt by 0.7 per cent to $3.16, Dogecoin (DOGE) increased by 0.6 per cent to $0.3572, and Binance Coin (BNB) soared by 1.6 per cent to $710.31, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.