Stable FX Rate Eases Inflation, Falls Four Months Consecutively
Headline inflation rate fell month-on-month again to 14.63% in September 2026, the fourth consecutive decline since February.
According to the data released by the National Bureau of Statistics for September, food inflation was 19.59% as against 20.16% it was in the same period in 2025. Though fuel prices have been rising as a result of the war in Iran, inflationary pressure from the crisis has been moderated in Nigeria by the stability in the foreign exchange market, an important factor in a heavily import dependent economy.
Exchange rate has stabilized around the N1,330 to N1.400/USD bandwidth since May last year as the Central Bank of Nigeria (CBN) sustains foreign exchange accretion to maintain confidence in the foreign exchange market. This approach has reduced pressure on the naira with its impact felt on prices of goods and services.
Analysts are however forecasting a moderate rise in the wake of the CBN recent dovish monetary policy stance. On September 22nd, the apex bank announced a 350-basis point reduction in monetary policy rate from 26.5% to 23%. According to Olayemi Cardoso, the CBN Governor the cut was an operational “reset” and re-calibration to align the policy rate with prevailing market realities and strengthen monetary transmission, rather than an official shift away from maintaining price stability.
The expected general election is also expected to lead to fiscal expansion as political actors embark on spending extravaganza to woo voters. This may tick up prices moderately to force another CBN’s “reset” as Nigerians struggle with the ongoing cost-of-living crisis.
