FSDH Expects June Inflation To Drop To 11.32%
FSDH Research expects the June 2019 inflation rate to drop to 11.32 per cent from 11.40 per cent recorded in May 2019.
The FSDH Merchant Bank disclosed this in the July edition of its monthly economic and financial market report on, ‘Five-year policy thrust of the Central Bank of Nigeria 2019-2024: Implications for the financial market.’
It stated, “Our analysis shows that the inflation rate will remain within the current region in the short-term if there is no shock.”
In the research, it noted that the Central Bank of Nigeria released its policy thrust for the next five years, which had four key macroeconomic targets for 2019-2024.
It mentioned them to be the double-digit growth rate in the Gross Domestic Product, single-digit inflation rate, foreign-exchange rate stability, and accelerating employment rate.
In order to achieve the targets, the FSDH suggested that the CBN should preserve domestic macroeconomic and financial stability, create robust payment system infrastructure, and work with the Deposit Money Banks to improve access to credit for smallholder farmers, micro, small and medium enterprises, consumer credit and mortgage facilities for bank customers.
It urged the CBN to grow external reserves, and support efforts at diversifying the economy through intervention programmes in the agricultural and manufacturing sectors.
In research, the FSDH reviewed the policy and the implications for the financial market and outlined the opportunities.
With the implementation of these priorities, it added, more funds would be available to finance non-oil export-led sectors.
This should create new businesses, reduce import dependency, grow foreign exchange earnings, ensure stable exchange rate and possibly cause the value of the currency to remain stable to appreciate, it stated.
Part of the report read, “We expect growth in non-oil exports from Nigeria and reduction in the cost of exporting goods from Nigeria, therefore, making exportation more profitable than before.
“There may be a reduction in the country’s import bill, a reduction in the cost of inputs for manufacturing companies and the development of agro-allied industries.
“There may also be a boost to the development of commodity exchange and opportunities in logistics business as a result of the growth of agriculture and related businesses.”