by Ademola Alawiye

Friday, 18 Feb 2011

The inflation rate rose in January for the first time in five months on higher food and energy prices, raising the possibility of an increase in interest rates.

According to a statement by the National Bureau of Statistics, the rate climbed to 12.1 per cent in January, from 11.8 per cent in December.

The statement noted that the key components of the inflation basket recorded noticeable increases, adding that prices of energy products were up during the month.”

The Central Bank of Nigeria had raised its monetary policy rate to 6.50 per cent on January 25, as part of measures to reduce the inflation rate.

The CBN Governor, Mr. Lamido Sanusi, had said in a recent interview, “For cosmetic reasons, it is extremely important to make sure that we attack inflation. The CBN is targeting an inflation rate of less than 10 per cent.”

Sanusi also said after the Monetary Policy Committee meeting that the decisions of the committee were informed by various fiscal economic considerations at the domestic and foreign levels. He added that that they were expected to help in tackling the risks of inflation, excess liquidity and encourage savings as a strategic option of achieving sustainable growth of the economy.

He noted that the risk of inflation had remained a major concern as the trend continued to show upward scale as a result of the liquidity injections from the likely increase in government spending in the long run up to the April 2011 elections.

The Minister of Finance, Mr. Olusegun Aganga, had said that Nigeria’s economy would expand by 7.98 per cent this year, compared with about 7.85 per cent recorded in 2010.

 

Source: Punch