The Headline rate increased in January to 18.72%, another record high. This increase in the Year-on-Year inflation rate was mainly due to general price increases recorded across the food basket for example bread, cereals, meat, fish, tubers, oils and fats.

Exchange rate sensitive foods (bread and cereals) were victims of forex scarcity and exchange rate woes. The others suffered from cost-push effects from higher distribution and logistics costs.

The good news is that core inflation (inflation trend less seasonality and anomalies) and the month-on-month inflation rate slowed. This signals an imminent reversal in the inflationary trajectory.

The MPC will have enough data in its arsenal to determine monetary policy path for the second quarter of the year. Q4 2016 GDP numbers, February inflation rate and the Purchasing Manager’s Index are all due before the 21-22 of March when the MPC meet.

In the attached bulletin, the FDC Think-Tank analyses price movements in January.