Felicia Udeji Reporting
Edo State, Nigeria
Economists have stated that it will take some time for Nigerians to feel the impact of the current strengthening of the naira against the dollar on the prices of commodities in the country.
The Chief Executive Officer of Economic Associates, Ayo Teriba, explained to Truth Live News that the impact of the naira on prices exhibited a time lag.
He noted, “Foods that have been bought at the old exchange rate will still be tied to the old exchange rate.
“Whether a month or a quarter, it depends on the duration it takes to order and sell. The effect we should hope to see is that the prices have stopped going up. We call it acceleration.”
Echoing similar sentiments, President of Nigerian Economic Society, Adeola Adenikinju, highlighted the economic rationale behind the delay in price adjustments.
Adenikinju stated, “What people have in stock now was purchased at high prices. If they sell at lower prices, they are going to record losses.
“So until they replace the current one, that is when they will reduce their prices.
Recall that Nigeria has been battling soaring inflation, which accelerated to 31.70 per cent in February from 29.90 per cent in the previous month, driven primarily by food inflation, which rose to 37.92 per cent.
To tame the pacing inflation, the CBN raised the benchmark interest rate to 22.75 per cent in February from 18.75 per cent and further reviewed it upward to 24.75 per cent on Tuesday.