Nigeria’s inflation rate has increased to 16.5 percent from 15.6 in May.
This was made known by the National Bureau of Statistics in a statement on Monday.
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It is the highest rate since October 2005, according to data provided by the Central Bank of Nigeria.
The currency’s official exchange rate weakened to more than 280 per dollar, compared with the fixed rate of 197-199, and the naira trades at around 360 on the black market, increasing prices for consumers.
“Inflation will continue rising because the driving factors are still there, but there should be a slowdown in the subsequent months,” Babajide Solanke, an analyst told Bloomberg.
“Inflation may not necessarily cause monetary policymakers to increase rates, because that will hurt growth. They may choose to use other monetary instruments to tighten liquidity”, he added.
Among others, essentials, food prices rose to 15.3 percent in June, compared with 14.9 percent in May.
The International Monetary Fund (IMF) had warned that Nigeria’s economy will not appreciate to an impressive level in 2016 as it was performing below forecast.
Gene Leon, IMF resident representative in Nigeria, last week said energy shortages and delayed budget weigh on output in the country.
With deflation of the economy by 0.4 percent in the first quarter of 2016, Leon said predicted will experience some growth in the second half of the year, but he added that it would not be enough to upturn initial shrinkage.
“I think there is a high likelihood that the year 2016 as a whole will be a contractionary year,” he was quoted by Bloomberg.
“While the economy should look better in second half of the year, growth will probably not be sufficiently fast, sufficiently rapid to be able to negate the outcome of the first and second quarters.”
The Central Bank of Nigeria, which kept its benchmark rate at 12 percent in May, will announce its next policy decision on July 26.
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