LAGOS – Nigeria’s inflation remained steady below the central bank’s national single-digit target in August, a week before the monetary policy committee’s interest rate decision.

 According to a data, Nigeria’s headline inflation was 9.3 per cent year-on-year in August from 9.4 percent in July, the National Bureau of Statistics said, while growth in food prices , the largest contributor to the consumer inflation figure, rose to 8.7 percent in August from 7.9 percent in July.

Nigeria’s economy grew 7.72 per cent year-on-year in the second quarter of this year, the statistics bureau said. The Central Bank of Nigeria (CBN) said sub-Saharan Africa’s second-largest economy grew 6.64 percent in the first quarter of this year, and forecast full-year growth of 7.8 percent. The CBN has been tightening policy for months in an effort to curb inflation, raising its benchmark interest rate to 8.75 percent in July in the fourth straight hike this year.

The bank’s Monetary Policy Committee (MPC) meets next week and is expected to announce its decisions, including any changes to interest rates, on Tuesday.  Core inflation, which excludes some volatile components such as food and energy, remained in double digits in August and this, combined with a need to support the local currency, may prompt the MPC to raise rates again despite steadying inflation.

“The key question now is what this might mean for the MPC decision next week … While (holding rates unchanged) certainly can’t be dismissed, even a pause is unlikely to be the end of Nigeria’s tightening cycle — economic growth remains robust,” said Razia Khan, head of Africa research at Standard Chartered Bank.