Nigeria’s inflation reached 33.88% in October, sparking fears of another interest rate hike.
Rising petrol prices, a weak naira, and food supply issues are driving the increase, with food inflation hitting 39.16%.
In October, Nigeria’s inflation rate surged for the second consecutive month, reaching 33.88 per cent, up from 32.70 per cent in September.
Additionally, month-on-month inflation increased to 2.64 per cent from 2.52 per cent, prompting concerns of another interest rate hike by the Central Bank of Nigeria (CBN) later this month.
The rise in inflation was largely driven by high petrol prices and disruptions in food supply due to increased transportation costs.
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Analysts highlighted that the depreciating naira and fuel price hikes had significant impacts on the cost of goods and services.
Furthermore, the Financial Derivatives Company (FDC) noted that the weakened naira had compounded inflationary pressures, while analysts at CSL Stockbrokers pointed to the lagging effects of recent fuel price increases as contributing factors.
They warned that these pressures would continue to push inflation higher in the coming months.
Despite this, there was some relief for the naira, with data showing a 2.7 per cent appreciation, bringing the dollar rate down to ₦1,645.40 from ₦1,689.88.
However, the FDC stressed that the value of the naira remained crucial for future inflation trends, as a further depreciation could prompt the CBN to raise interest rates.
Meanwhile, food inflation, which reached 39.16 per cent in October, remains a major concern, exacerbated by the September floods in northern Nigeria and higher transportation costs.
As inflation continues to rise, many fear that the economic strain on Nigerian households will only deepen in the coming months.
