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Nigerian Inflation Slows to Nine-Month Low of 11.3%

Oct. 17 (Bloomberg) -- Nigeria’s inflation rate fell to a nine-month low of 11.3 percent in September as the impact of rising fuel prices eased.

Inflation in Africa’s largest-oil producer slowed from 11.7 percent in August, the Abuja-based National Bureau of Statistics said in an e-mailed report. The median estimate of 10 economists surveyed by Bloomberg was 11 percent. Prices rose 1 percent in the month.

The Central Bank of Nigeria, led by Governor Lamido Sanusi, left its benchmark interest rate unchanged at a record 12 percent this year to help support the naira. The bank’s goal is to bring the inflation rate down to less than 10 percent.

“At this pace, aggregate inflation should also be in single-digit territory in coming months and remain at similar levels in the first half of 2013,” Samir Gadio, an emerging-markets strategist at Standard Bank Group Ltd. in London, said today in e-mailed comments. An inflation rate below 10 percent would be “conducive for a relatively more accommodative monetary stance, with the possibility of moderate policy rate cuts next year.”

Core inflation, which excludes agricultural food products, slowed to 13.1 percent from 14.7 percent, partly due to base-year effects, the statistics bureau said.

‘Tight Money’

Food prices, which account for more than half the index, rose 10.2 percent from a year earlier, compared with 9.9 the previous month.

“Assuming nothing else changes, inflation is likely to continue to decelerate in the months ahead as tight money supply has more of an impact,” Razia Khan, the head of Africa economic research at Standard Chartered Plc in London, said in an e-mailed note to clients after the data release.

Sanusi on Sept. 11 defended the record-high benchmark interest rate, saying the tight monetary stance managed to keep inflation in check and supported the naira. He said on Aug. 23 inflation would peak in August or September after the government partially removed a subsidy on gasoline in January. Instead, this month was the third consecutive decline.

Sanusi said Sept. 11 the bank had earlier forecast inflation would reach as high as 15 percent.

To contact the reporter on this story: Maram Mazen in Abuja at mmazen@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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