Nigeria’s inflation rate decreased to 23.18% year-on-year in February, reflecting a significant drop from previous months due to a rebasing of the Consumer Price Index. Following actions by President Tinubu to reform the economy, inflation has decreased from 34.80% in December to 24.48% in January. The central bank has opted to maintain its key interest rate amid these developments.
According to Nigeria’s statistics agency, the headline inflation rate decreased to 23.18% year-on-year in February, compared to January figures. This decline seems to follow significant adjustments made to the Consumer Price Index (CPI) to better reflect current consumption patterns. Notably, inflation fell sharply from 34.80% in December to 24.48% in January, marking the largest reduction in over ten years after the rebasing exercise that updated the CPI’s base year from 2009 to 2024.
The inflationary pressures had previously reached a continuous 28-year high last year, largely driven by actions taken by President Bola Tinubu. His administration implemented strategies to terminate expensive subsidies and devalued the naira currency upon his assumption of office in 2023. These measures were part of a broader economic reform aimed at stabilizing the nation’s finances.
During its first rate-setting meeting of the year, the central bank chose to maintain its key interest rate. This decision reflects a careful consideration of foreign exchange stability and the recent decline in inflation, following six rate hikes conducted in the previous year.
In summary, Nigeria’s inflation rate has shown a promising decline, easing to 23.18% in February, following substantial adjustments to the Consumer Price Index. This trend follows unprecedented highs experienced in the previous year, influenced by major economic reforms. The central bank’s decision to hold interest rates further indicates a cautiously optimistic stance towards monetary stability despite previous hikes.
Original Source: money.usnews.com
