Nigeria’s Inflation Rate Declines to 23.18% in February 2023

Nigeria’s inflation rate decreased to 23.18% year-on-year in February 2023 from 24.48% in January, following significant policy changes. The NBS rebased the CPI, which contributed to this reduction. The central bank decided to keep the key interest rate unchanged amidst aims for foreign exchange stability and declining inflation.

In February, Nigeria’s headline inflation rate decreased to 23.18% year-on-year, as reported by the nation’s statistics agency. This decline follows a significant drop from 34.80% in December and 24.48% in January, marking the first major reduction in over a decade. The drop is attributed to the recent rebasing of the Consumer Price Index (CPI) conducted by the National Bureau of Statistics (NBS), which introduced 2024 as the new base year instead of 2009.

This inflation surge had previously reached 28-year highs, primarily driven by President Bola Tinubu’s initiatives to eliminate expensive subsidies and devalue the naira currency after assuming office in 2023. In light of this trend, the central bank opted to maintain its key interest rate during its initial rate-setting meeting of the year, following six increases last year. This decision was influenced by aims to ensure foreign exchange stability and manage falling inflation.

In summary, Nigeria is witnessing a gradual easing of inflation rates, which have significantly declined from late 2022 to February 2023. This trend can largely be attributed to recent policy changes regarding subsidies and currency valuation. The central bank’s decision to hold its key interest rate indicates a strategic approach to maintaining economic stability amid fluctuating inflation rates.

Original Source: money.usnews.com