Nigerian inflation accelerated for a seventh consecutive month in May driven largely by high electricity rates as well as other energy prices.
The inflation rate rose to 15.6 percent from 13.7 percent the month before, the National Bureau of Statistics said in the May 2016 consumer price index published on its website.
According to the NBS, the increase in rates in May relative to April reflects an overall increase in general price level across the economy as all divisions which contribute to the Headline index increased at a faster pace in May.
The Nigerian central bank had pegged the naira at 197-199 per dollar in March 2015 and restricted trading in foreign currencies, making imports more costly for a nation that’s a net importer of food and refined fuel. But with the policies deepening the country’s economic crisis, the central bank said it would introduce a more flexible exchange policy, although it gave no guidance how this will be done.
President Muhammadu Buhari who had always spoken in favour of the forex restrictions is also backing the apex bank’s recent move. In an essay in The Wall Street Journal, he wrote: “The central bank has moved to introduce a greater flexibility in our exchange rate policy. These actions are a down payment on our people’s ability to succeed”. However, he gave no details how the policies would be implemented.
Inflation has been above the central bank’s 6 percent to 9 percent target band since May 2015.