Nigeria’s June CPI data to show cooling inflationary pressures – Expert

A Senior Market Analyst at FXTM, Lukman Otunuga, has stated that Nigeria’s June CPI data, scheduled for release on July 15, is expected to indicate a cooling of inflationary pressures.

According to him, this could provide some relief to the Central Bank of Nigeria (CBN), which has been sharply increasing interest rates throughout 2024.

He mentioned that inflation is expected to have decreased to 21.4 per cent year-on-year from 23 per cent in May – marking the fourth consecutive month of decline. However, the slowdown is largely a technical adjustment supported by recent gains in the Naira amid higher non-oil exports and a weaker dollar.

He stated that the CBN is scheduled to meet later this month and will most likely keep rates unchanged at 27.5 per cent.

According to him, a key challenge for the country will be adjusting its budget to lower oil prices. In fact, the budget was based on oil production of two million barrels and oil prices of $75.

He said Brent is trading around $70, with the nation producing 1.544 million barrels per day of crude in May, according to OPEC. Nigeria hopes to increase production to 1.9 million barrels per day by the end of 2025. 

However, its impact on the economy may be muted if oversupply and tepid demand keep oil prices subdued. Brent has risen four per cent this month but remains over six per cent lower since the start of 2025.

He noted that a surge of high-risk events could inject fresh volatility into global financial markets this week.

According to him, top-tier data—including US inflation figures, the unofficial start of earnings season, and US Congress’ “Crypto Week,” among other themes—could present new opportunities.

He said that amid this, uncertainty over global trade will contribute to the volatility after President Donald Trump threatened 35 per cent tariffs on the EU and Mexico over the weekend.

Regarding US inflation, he mentioned that this may influence expectations of Fed interest rate cuts in the second half of the year. 

Markets are forecasting the CPI to rise 2.6 per cent from 2.4 per cent in the previous month, with core CPI increasing to 2.9 per cent from 2.8 per cent. 

Signs of rising prices may reduce expectations of rate cuts by the Fed, thereby strengthening the dollar as a result.