The monetary tightening policy of the Central Bank of Nigeria is beginning to yield results as the country’s inflation experiences a sharp decline.
Figures released by the National Bureau of Statistics on Wednesday in Abuja showed that the country’s inflation dropped to 8.6 per cent in March from 9.5 per cent recorded in February.
The report signed by the Statistician-General of the Federation, Dr Yemi Kale, said the food index increased year-on-year by 9.5 per cent.
This, it noted, was 1.5 percentage points lower than the 11.0 per cent recorded in February.
On a month-on-month basis, it added that the food index increased by one per cent between February and March.
For the rural composite CPI, the NBS report put it at 8.1 per cent year-on-year, up from 9.5 per cent in February.
The report read in part, “In March 2013, the Consumer Price Index, which measures inflation, rose by 8.6 per cent year-on-year (compared to 9.5 per cent in February).
“Relative to February, the relatively slower rise in the headline index could primarily be attributable to base effects from March of 2012.
“As a result of substantially higher price levels in March of 2012, the implications are that the year-on-year changes exhibited for March 2013 are muted.”
The apex bank had last month, for the ninth consecutive time, left the Monetary Policy Rate unchanged at 12 per cent with a corridor of +/-200 basis points around the midpoint.
It had also retained the Cash Reserve Requirements at 12 per cent and Liquidity Ratio at 30 per cent with a Net open position at one per cent.
The CBN governor, Mr. Lamido Sanusi, said, in arriving at the decision, the bank was faced with three options.
The options are: an increase in rates in response to the rise in headline and food inflation and pressure on exchange rates; a reduction in rates in view of declining core inflation and GDP growth; and to retain the current monetary policy stance to sustain the gains of monetary policy.