Commodities
Naira appreciation will impact inflation in 12 months – Ayo Teriba
Dr. Ayo Teriba, the chief executive of Economic Associates (EA), says the recent Naira appreciation will impact the country’s inflation in three to twelve months.
In an interview with the Daily Post on Monday, Teriba disclosed this while reacting to the March inflation figure, which rose to 33.20 percent.
According to the National Bureau of Statistics, the March inflation figure showed that the prices of goods and services continued to soar despite the appreciation of the naira to the dollar.
However, Teriba said the inflation figure in March represents a lag of months.
He noted that it will take three to 12 months for the country to start seeing the impact of the exchange improvement on the prices of goods and services.
“The devaluation of the exchange rate: If you look at where the naira was one day and what it is today, you will see a massive devaluation year-to-date.
“That improvement in exchange will see through, but with a lag, the inflation you are reading now is in March.
“The tightening should be reflected in the prices of goods in less than three months. In six or twelve months, you will see the impact.
“It is not overnight, as you see the appreciation of the naira. The impact of monetary policy on the exchange rate takes three to 12 months to manifest.
“We will have to see the acceleration of inflation first before deceleration,” he told the Daily Post.
Recall that Nigeria’s headline inflation rate soared to 33.20 percent in March.
The development comes amid the sustained gains recorded by the naira against the dollar at the foreign exchange market, which stood at N1,136.04 per dollar at the FMDQ market.
