Inflation numbers were released today and there was a unified decline in both core and food inflation in spite of an increase in monthly inflation. Base year effects remain a major contributing factor to the slowing inflationary pace.

The CBN continued its FX intervention this week, with $350m and $31m in the forwards and spot markets respectively. This fuelled an appreciation in the naira to N400/$ before falling to N407/$, posing the question of how much more the CBN has to intervene to stabilize the naira.

We are yet to see the impact of the CBN’s intervention on commodity prices as manufacturers await more clarity and sustainability in the market. Also these manufacturers have to sell off old inventory before FX cost advantages at the new rates can be passed on to consumers.

The FDC Think Tank summarizes the impact of global and domestic developments on the commodity markets.