Nigeria, the US and the UK are scheduled to release their consumer price index reports this week. Although prices have started to stabilize in most countries, prices in Nigeria remain high.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) will today announce Nigeria’s crude oil production for July.
“Prices are starting to calm down in most countries, but they remain high in Nigeria.”
Monday, August 12th
OPEC to release July oil market report
The Organization of the Petroleum Exporting Countries (OPEC) will release its July oil market report on Monday.
According to OPEC, Nigeria’s average daily crude oil production increased slightly in June to 1.276 million barrels per day (bpd).
This is an increase of just 25,000 barrels per day from the 1.251 million barrels per day recorded in May, according to data from direct communication with Nigerian authorities.
Meanwhile, according to secondary sources, Nigeria’s average daily crude oil production in June was 1.362 million barrels per day, down 10,000 barrels from May’s 1.372 million barrels per day.
Despite the decline in production, Nigeria maintains its position as Africa’s largest oil producer, closely followed by Libya, which produced 1.2 million barrels per day in June, according to secondary sources. did.
June’s average crude oil production of 1.27 million barrels per day means that Nigeria is consistently below OPEC’s production quota of 1.5 million barrels per day and budget target of 1.78 million barrels per day in the first half of 2024. It shows.
Related article: OPEC predicts Dangote refinery will put pressure on Europe’s oil industry
Wednesday, August 14th
US to release July inflation report
The U.S. Bureau of Labor Statistics will release its July U.S. inflation report on Wednesday.
The U.S. inflation rate reached 3% in June, down 0.1% from May and the lowest level in nearly three years.
The U.S. consumer price index, a broad measure of the cost of goods and services, held inflation in check for the month as gasoline prices fell 3.8%, offsetting a 0.2% rise in food and housing prices.
The so-called core CPI, which excludes volatile food and energy costs, rose 0.1% month-on-month and 3.3% year-on-year. The annual increase in core interest rates was the smallest since April 2021.
UK waits for inflation rate in July
The Office for National Statistics (ONS) will publish the UK Consumer Price Index on Wednesday.
Prices in the UK rose 2% in the year to June 2024, unchanged from their lowest level in almost three years in May.
The Bank of England aims to keep inflation at 2%. Inflation was well above that, but the central bank set interest rates at a maximum of 5.25% to curb price increases.
At its last meeting, the monetary authorities decided to cut interest rates to 5% in response to easing inflationary pressures.
The ONS said the rise in inflation was driven by a sharp rise in hotel prices. The cost of package holidays, movies, theaters and concerts also rose.
Clothing and footwear prices have fallen, and food and drink inflation has fallen sharply from recent highs.
The inflation rate has fallen significantly since reaching a 40-year high of 11.1% in October 2022.
Investors expect inflation to fall further into the spring, reflecting a sharp decline in natural gas prices since last year and a slowdown in food price increases.
CPI measures price changes from the consumer’s perspective. This is the Bank of England’s official price stability target.
Related article: Weak naira, inflation weighs on cement makers’ profits
Thursday, August 15th
NBS to release Nigeria’s inflation rate
The National Bureau of Statistics will release Nigeria’s inflation statistics for July on Thursday.
Nigeria’s annual inflation rate rose as expected to 34.19% in June due to higher food prices, making it the fourth highest inflation rate since 1996.
The headline figure for March, April, and May decreased significantly for three consecutive years, but turned to a 0.17% increase in June 2024, which contradicts the predictions of many analysts. It is something.
Pressure on June numbers was widespread as the food basket and core inflation basket rose by 21 and 36 basis points to 40.87% and 27.40%, respectively.
Inflation continues to accelerate due to high energy costs, the impact of exchange rate fluctuations, and persistent security concerns in the country’s agricultural producing countries.
To combat inflation, the Monetary Policy Committee (MPC), headed by central bank governor Olayemi Cardoso, raised the country’s benchmark interest rate by a combined 800 basis points to 26.75%.
Analysts expect inflation to start moderating in July, supported by base effects and a bumper harvest later this year.
“The government’s plan to import 250,000 MT of wheat and 250,000 MT of maize also bodes well for the food price outlook, providing a positive offset against inflation risks,” they said.
“Overall, we expect headline inflation to slow by 50 basis points to 33.7%,” Cardinal Stone analysts said.
Olaolu Boboi, chief economist at Cardinal Stone Research, said the base effect on inflation suggests that inflation will peak in June and be subdued in July.
“There will be three major pressure points on inflation in July: upward pressure on fuel prices from scarcity, exchange rate pressure, and sustained food pressure, but that alone will not be enough to maximize the benefits of the base effect. “It’s not enough,” Boboi said.
CBN’s rare $876 auction increases liquidity as naira heads towards convergence
The naira continued to rise and almost converged in the official and parallel markets after $876 million was sold through the Dutch retail auction system.
According to data from FMDQ Stock Exchange Limited, the dollar exchange rate on the Nigerian Autonomous Foreign Exchange Market (NAFEM) was 0.18% at N1,593.62 compared to N1,596.52 after trading last Thursday.
In the parallel market, commonly referred to as the black market, the naira further appreciated on Thursday while the dollar crashed to as low as 1,595 naira. This represents an increase of 0.94 per cent (15 naira) compared to the 1,610 naira offered in morning trading on the black market.
In the latest demonstration of the CBN’s continued commitment to supporting the proper functioning of the foreign exchange market by increasing liquidity where necessary, the apex bank announced that provided $876 million to satisfy bids submitted by
In line with its commitment to provide transparent access to foreign exchange to all authorized customers, the CBN leadership has launched the Retail Dutch Auction System (RDAS) to facilitate foreign exchange sales directly to end users. Introduced an additional mechanism through .
The naira is under pressure from seasonal demand from summer tourists and businesses seeking dollars to bring goods into the import-dependent country.
