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Finance Nigeria's inflation rate rises for the first time in 2018

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Nigeria’s annual inflation rate rose to 11.23% driven by increases in food prices in Africa's largest economy.

Nigeria's inflation rate rises for the first time in 2018 play Picture of a woman in a Nigerian market

Nigeria’s annual inflation rate rose to 11.23% in August, rising the first time in 2018, driven by increases in food prices in Africa's largest economy.

The National Bureau of Statistics (NBS) disclosed this in its latest Consumer Price Index (CPI) report titled ‘CPI and Inflation Report August 2018’, released on Friday, September 14, 2018, in Abuja, Nigeria's capital city.

This is 0.09% points higher than the rate recorded in July 2018 (11.14%) and represents the first year-on-year rise in headline inflation following eighteenth consecutive disinflation.

Food prices rose 13.16% over the previous year, versus 12.85% in the previous month.

On a month-on-month basis, the food sub-index increased to 1.42% in August 2018, up by 0.02% points from 1.40% recorded in July.

According to the report, the rise in the food index was caused by increases in prices of Bread and cereals, Potatoes, yam and other staple food.

In July 2018, the annual inflation rate dropped to 11.14% (year-on-year), the lowest in over 2 years and 0.09% points less than the rate recorded in June 2018 (11.23%).

Ahead of 2019 general election, it is not so clear how the monetary authority will attend to the key lending rates.

In a Bloomberg report, Dr Joseph Nnanna, CBN Deputy Governor, at the sidelines of a conference in Egypt in August, said all the members of the Monetary Policy Committee had supported to increase the lending rate if inflationary pressures build up.

But experts believed that increasing the lending rate at this time may make it difficult for businesses to raise funds.

The monetary authority has been holding the key rates since July 2016, after increasing it to support Naira and curb inflation at as that time.

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