The National Bureau of Statistics (NBS) is set to release the Consumer Price Index (CPI) report for the month of April.
Analysts anticipated that inflation would remain at an all-time high.
In March, headline inflation tipped 22.04%, marking the highest rate in seventeen and a half years, primarily driven by increased transportation costs and rising food prices.
Transport costs rose by 2.2% last month forcing a 1.7% increase in the cost of food and beverage.
While the fall in diesel prices and seasonal harvests calmed expectations of higher inflation, analysts still project that inflation would rise.
To address towering inflation, the Monetary Policy Committee (MPC) of the Central Bank (CBN) has continuedly raised interest rates.
In its previous meeting held in March 2023, the MPC increased the reference overnight lending rate by 50 basis points, bringing it to 18%.
In what looks like forward guidance delivered at a two-day retreat organized by the Monetary Policy Department of the CBN over the weekend, the monetary policy authority reaffirmed its commitment to implementing measures to control the country’s escalating inflation.
Experts argued that the monetary policy rate hikes are approaching the point of neutrality where the only impact of higher rate hikes will be felt by businesses in the form of higher borrowing costs.
This is so because, inflation is primarily influenced by supply-side bottlenecks such as insecurity, poor power supply, limited access to foreign exchange, logistic challenges in the form of cargo clearance at ports, and poor fiscal policy management.
The introduction of the Fiscal Policy Measures (FPM) and Tariff Amendment for 2023, scheduled to take effect on June 1, 2023, along with the anticipated removal of the petrol subsidy regime, are expected to keep inflation above the CBN’s near-term target.
