The Central Bank of Nigeria’s monetary policy committee will meet on Monday and Tuesday in a highly anticipated deliberation that could hold benchmark interest rates steady for the first time after four consecutive hikes while the Debt Management Office auctions N150 billion in FGN bonds.
“But even as food inflation decelerates month-on-month, it is still higher than 29.34 percent recorded last August.”
Monday, 23 September
DMO to auction N150 billion in FGN bonds
The Debt Management Office will issue three FGN bonds worth N150 billion today.
The issuance includes reopening a five-year N70 billion bond alongside reopenings of seven- and nine-year bonds, each valued at N50 billion and N30 billion each.
At the last auction in August, DMO sold N374.75 billion across the three bonds offered, with the stop rates of the longest tenure at 20.45 percent.
It sold five times its offer on its longest tenure (reopened nine-year bond) in the August FGN bond auction on Monday.
The N190 billion FGN bonds offered across three tranches on Monday are the lowest auctioned this year, down from N3 billion offered last month.
Analysts said that the reduced offer size signalled a possible reduction in government borrowing.
Nigeria’s total debt stock rose in the first quarter (H1) of 2023 to N121.67 trillion, from N97.34 trillion as of December 2023, according to data from the Debt Management Office (DMO).
Read also: DMO douses concerns over delayed coupon payment on savings bond
NBS to release selected food prices
The National Bureau of Statistics is expected to release selected food prices for August on Monday.
Food inflation, a significant driver of overall inflation, declined from 39.53 percent in July to 37.52 percent in August, marking the second month of consecutive fall in nearly two years.
But even as food inflation decelerates month-on-month, it is still higher than 29.34 percent recorded last August.
According to the statistics agency, the rise in food inflation on a year-on-year basis was caused by increases in prices of bread, maize, grains, cereals, cassava tuber, yam, palm oil, vegetable oil, etc.
“On a month-on-month basis, the food inflation rate in August 2024 was 2.37 percent, which shows a 0.10 percent decrease compared to the rate recorded in July 2024 (2.47%),” the NBS report stated.
It however attributed the fall on a monthly basis to the decline in the rate of increase in the average prices of tobacco, tea, milk, yam, groundnut oil, etc.
Transport fare watch
The National Bureau of Statistics will be releasing the average fare paid by commuters on bus journeys, okada drops, and air travels for August on Monday.
According to the bureau, the average fare paid by commuters for bus journeys within the city per drop decreased to 2.18 percent from N963.58 in June 2024 to N942.61 in July 2024. Meanwhile, on a year-on-year basis, it declined by 29.46 percent from N1,336.29 in July 2023.
Moreover, the average fare paid by commuters for bus journey intercity per drop was N7,117.17 in July 2024, indicating an increase of 0.35 percent on a month-on-month basis compared to N7,092.03 in June 2024. However, the fare rose by 20.23 percent from N5,919.49 in July 2023 on a year-on-year basis.
For air travel, the average fare paid by air passengers for specified routes for a single journey was N98,561.74 in July 2024, showing an increase of 9.65 percent compared to the previous month (June 2024). On a year-on-year basis, the fare rose by 25.12 percent from N78,775.74 in July 2023.
The average transport fare paid on Okada transportation was N483.33 in July 2024, which shows an increase of 1.22 percent when compared with the value recorded in June 2024 (N477.49). On a year-on-year basis, the fare decreased by 25.20 percent when compared with July 2023 (N646.12).
With the rise in pump price, transport fares have more than doubled, putting transport costs during August till now at a potentially high price.
Read also: Rail transport generated N1.69bn in Q2 – NBS
Tuesday, September 24, 2024
NBS to publish foreign goods and statistics report
The National Bureau of Statistics is expected to publish Nigeria’s foreign goods and statistics report for the third quarter (Q3) on Tuesday.
In Q2, total merchandise trade in Africa’s most populous nation stood at N31.8 trillion, a decline of 3.76 percent compared to the preceding quarter and a 150.39 percent jump compared to a year ago.
This is even as the country recorded a N6.95 trillion trade surplus. This marks a 33.63 percent increase from the N5.19 trillion recorded between January and March 2024, bringing the total value to N12.14 trillion in the first half of 2024.
Exports in Q2 were dominated by crude oil valued at N14.5 trillion, representing 74.98 percent of total exports, while the value of non-crude oil exports rose to N4.8 trillion, accounting for 25.02 percent of total exports, of which non-oil products contributed N1.9 trillion, or 10.01 percent of total exports.
On the other hand, the share of total imports declined by 10.71 percent in Q2, with the value of imports amounting to N12.4 trillion, but a rise of 97.93 percent from the value recorded in the corresponding quarter of 2023 (N6,301.95 trillion).
China ranked highest among the top trading partners on the import side in Q2, followed by Belgium, India, the United States of America, and the Netherlands.
On the export side, the top trading partners with Nigeria were Spain, the United States of America, France, India, and The Netherlands.
MPC to meet for a likely pause in interest rate
The Central Bank of Nigeria’s monetary policy committee will be meeting on Monday and Tuesday (September 23 to 24, 2024) in a rate decision that could put a pause on rising interest rates.
The meeting is highly anticipated, as market players, businesses, and consumers await the outcome of these critical policy deliberations, especially as inflation has begun to wane.
Analysts had projected that the committee might consider cutting rates to stimulate economic activities. However, the recent hikes in gasoline prices have introduced a new challenge, leaving the MPC at a crossroads, analysts said.
“One, the inflation rate at 32.15 percent is still very high. Changing monetary policy stance may be too soon. Two, there is a high tendency that the inflation number will reverse the trend and start an upward movement from September 2024 because of the adjustment of petrol pump price across the country,” a financial analyst said.
At the 296th meeting of the MPC in July, the committee increased the policy rate by 50 basis points, bringing it to 26.75 percent. Additionally, the MPC revised the asymmetric corridor around the Monetary Policy Rate (MPR) to +500/-100 basis points, up from +100/-300 basis points, while keeping all other parameters unchanged.
