Inflation Rate Predicted to Rise to 32.63% in March 2024 – CBN Official

The Deputy Governor of the Central Bank Nigeria (CBN), Muhammad Sani Abdullahi, has predicted that Nigeria’s inflation rate is expected to surge to 32.63 percent in March 2024. He made the clarification when he delivered this prediction at the CITI-CEEMA Macro Conference in London on March 20, citing key economic indicators and projections.
His presentation shows that the inflation spike is driven by three major factors: escalated energy costs, the impact of exchange rate fluctuations, and ongoing insecurity concerns.
“Lingering impact of fuel subsidy removal, resulting in an increase in the cost of household utilities, transportation and production costs.
“Exchange Rate Passthrough: Depreciation of the naira resulting from the market-determined exchange rate policy, is likely to have a passthrough effect on domestic prices.
“Insecurity: Impact of insecurity on food production, the winding down of the harvest season, and high cost of farm input could impact negatively food prices.”
The CBN, however, anticipates a turnaround, with inflation expected to start its downward trajectory beginning in May 2024.
This optimism is based on a series of strategic measures to tackle rising inflation. Among these are the adoption of an Inflation Targeting Framework, deploying more active communication strategies, and shifting towards a tighter monetary policy stance.
Notably, the Monetary Policy Rate (MPR) has seen an increase of 400 basis points, reaching 22.75%, and the Cash Reserve Ratio (CRR) has been adjusted to 45 percent from the prior 32.5 percent. Furthermore, adjustments have been made to the asymmetric corridor around the MPR to +100/-700 basis points from +100/-300 basis points, signalling a robust stance on managing inflation expectations.