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At a time most Nigerians purchasing power have been significantly reduced to a degree of insignificance due to the monthly hike in inflation price, latest reports say September Inflation figures might skyrocket.
According to Financial Derivatives Company Limited, FDC, the nation’s year-on-year (YoY) headline inflation rate for the month of September would hit 18.0%, an increase of 0.4 percent from August 17.6 percent. Based on its submission, it will be the highest level in 11 years.
However, a change of 0.4% indicates that the rate of increase is slowing, showing an indication that the trend of inflation is likely to reverse.
In comparism with the August rate, pegged at 17.6 percent, month-on-month inflation for September estimated at 0.95%, is a decline from August rate of 1.01%. Annualised, monthly inflation rate is estimated at 12.01%.
Meanwhile, monetarists are of the opinion that the country is in a state of stagflation, while Fiscalists believe that Nigeria is in a recession although both schools agree about declining growth, however, they disagree about the direction of inflation.
In a state of stagflation, inflation and unemployment increases, however in a recession economic growth and inflation are moving in the same downward trajectory while unemployment rises. The pace of increase in consumer prices is declining for both headline and monthly inflation.
91 days Treasury bill rates on the other hand have declined from the average peak of 14.99 percent to 13.9 percent in the primary market and from 16 percent to 13.61 percent at the secondary market, while 364 Treasury bill rates have remained relatively flat.

The initial high demand for fixed income instruments appears to be dissipating as the pace of capital inflows remains below expectations.
FDC in its analysis noted that the parallel market rate depreciated significantly while the interbank market rate appreciated in the month of September.
This according to them can be attributed to the temporary shock in the parallel market, following an abnormal spike in demand.
It noted that the decision by the CBN to halt the forex operations of 9 banks, due to an outstanding payment of $2 billion owed to the NNPC, led to short covering by these banks in the parallel market, therefore hiking demand.
However, since the lifting of the ban, the naira has been gradually appreciating in the parallel market. The naira which traded at N490/$ at the peak of the shock has appreciated to N460/$.
On fuel price, FDC disclosed that diesel prices eased in September to an average of N190/liter from August’s average of N193.53/liter, partly due to heavy rains and reduced attacks in the Niger Delta, due to a ceasefire agreement.
The price of petrol maintained an average price of N143/ liter with some filling stations selling as low as N140/liter.
Presently, financial analysts have expresses optimism that the nation’s economy will soon bounce back as the federal government is taking the ‘buy made in Nigeria products’ with all sense of seriousness.

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