Business

IMF Warns Global Inflation Could Stay High Until 2025

Published

2 years ago

April 11, 2023

The underlying drivers of historically-high global inflation could persist until 2025, the International Monetary Fund’s chief economist told AFP on Tuesday.

Prices around the world have surged since the rapid reopening of the global economy after the Covid-19 pandemic. Inflation was further fueled by Russia’s invasion of Ukraine last year, which caused commodity prices to spike.

“Inflation is still with us,” Pierre-Olivier Gourinchas said in an interview in Washington, shortly after the IMF raised its forecast for inflation this year to seven percent.

Despite an aggressive, concerted, campaign by central banks to slow price increases by raising interest rates, inflation in many countries remain well above the two percent target set by the US Federal Reserve and others.

“Core inflation in particular has not started to come down significantly back towards the target,” Gourinchas said, referring to a measure that strips out volatile food and energy prices.

“It probably won’t be until the end of 2024, maybe into 2025,” he added.

“The persistence of core inflation means that central banks may have to keep their interest rates higher for longer“, he said.

Such a move would put additional strains on a financial sector already rocked by the dramatic collapse of Californian lender Silicon Valley Bank (SVB) last month.

SVB’s fall was swiftly followed by the failure of another US regional lender and the merger under pressure of Swiss investment banking giant Credit Suisse with its regional rival UBS.

Gourinchas said “very forceful intervention” by the Fed, Swiss National Bank and others had helped to tackle the immediate challenges unleashed by SVB’s failure, but warned that “pockets” potential challenges remained.

“We’re in a situation where there is elevated levels of nervousness in the market,” he said.

An area of concern is the real estate sector, in part due to the slow post-pandemic return to offices in many cities around the world.

Gourinchas warned that there may be other financial institutions like SVB that are over-exposed to interest rate risks, which could cause problems if rates stay high while central banks fight inflation.

Countries without the fiscal tools to help fight inflation could also suffer, Gourinchas warned.

“One should be very vigilant going ahead to make sure that the places that look weak are reinforced, are buttressed,” he said.

Business

Naira Depreciates Against Dollar

Published

1 week ago

July 4, 2025

Editor

The Naira experienced a slight depreciation on Friday at the official market, trading at N1,528.56 to the dollar.

Data obtained from the website of the Central Bank of Nigeria (CBN) showed that the Naira lost N2.73.

This represents a 0.17 percent loss compared to the N1,525.82 recorded on Thursday.

The Naira, which opened the week on Monday with a gain of N9.52 against the dollar, held steady gains until Thursday.

On Wednesday, the local currency gained N3.42 against the dollar and received commendation from the International Monetary Fund (IMF).

The IMF, in its 2025 Article IV Consultation report on Nigeria, commended the CBN for its reforms to the foreign exchange market, which supported price discovery and liquidity.

Business

JUST IN: Dangote Refinery Hikes Petrol Ex-depot Price

Published

3 weeks ago

June 20, 2025

Editor

Nigerians may soon pay more for petrol as the Dangote Petroleum Refinery on Friday increased its ex-depot price for Premium Motor Spirit to N880 per litre, raising fresh concerns over fuel affordability and price volatility in the downstream sector.

Checks on petroleumprice.ng, a platform tracking daily product prices, and a Pro Forma Invoice seen by The PUNCH confirmed the hike, representing a N55 increase from the previous rate of N825 per litre.

The increment would ripple across the entire fuel distribution chain, likely pushing pump prices above N900/litre in some parts of the country, especially in areas far from the distribution hubs.

The hike comes despite global crude prices falling. Brent crude dipped by 3.02% to $76.47, WTI fell to $74.93, and Murban dropped to $76.97 on Friday. The decline in benchmarks offers little relief due to persistent fears of sudden supply disruptions.

The refinery has increased its reliance on imported U.S. crude and operational costs amid exchange rate instability, which adds to its pricing pressure.

On Thursday, the President of the Dangote Group, Aliko Dangote, said his 650,000-barrel capacity refinery is “increasingly” relying on the United States for crude oil.

This came as findings showed that the Dangote Petroleum Refinery is projected to import a total of 17.65 million barrels of crude oil between April and July 2025, beginning with about 3.65 million barrels already delivered in the past two months, amid ongoing allocations under the Federal Government’s naira-for-crude policy.

Dangote informed the Technical Committee of the One-Stop Shop for the sale of crude and refined products in naira initiative that the refinery was still battling crude shortages, which had led it to resort to imports from the United States.

On Monday, the president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Festus Osifo, accused oil marketers of exploiting Nigerians through inflated petrol prices, insisting that the current pump price of PMS should range between N700 and N750 per litre.

He criticised the disparity between falling global crude oil prices and the stagnant retail price of petrol in Nigeria.

“If you go online and check the PLAT cost per cubic metre of PMS, convert that to litres and then to our Naira, you will see that with crude at around $60 per barrel, petrol should be retailing between N700 and N750 per litre.”

He asserted that if Nigerians bear the brunt of higher fuel costs, they should be allowed to enjoy the benefit of low pricing.

His forecast of increased costs now appears spot on, considering the latest developments.

Marketers are already adjusting. Depot owners and fuel distributors in Lagos and other cities anticipate a domino effect, with new price bands expected to follow Dangote’s lead.

Many had held back pricing decisions since Tuesday, when the refinery halted sales and withheld fresh PFIs. The delay fueled speculation, allowing opportunistic price hikes across various depots.

Business

Naira Appreciates At Official Market

Published

2 months ago

May 24, 2025

Editor

The Naira, which has seen steady appreciation against the Dollar all week, closed stronger on Friday, trading at ₦1,580.44 in the official forex market.

Data from the Central Bank of Nigeria’s website show the Naira gained ₦4.51k against the Dollar on Friday alone.

This marks a 0.28 per cent appreciation from Thursday’s closing rate of ₦1,584.95 in the official foreign exchange window.

The local currency maintained consistent strength throughout the week, recording gains daily.

On Monday, May 19, it traded at ₦1,598.68; on Tuesday, at ₦1,590.45; and on Wednesday, at ₦1,584.49.

These gains suggest increased investor confidence and improved forex supply, contributing to the naira’s performance.

Meanwhile, the CBN, at its 300th Monetary Policy Committee meeting held Monday and Tuesday, retained the Monetary Policy Rate at 27.5 per cent.