Investor Presentaiton
N/US$
900
800
700
IMPACTS: INFLATION PASS-THROUGH IS EXPECTED TO BE MODERATE
The parallel market had already passed through domestic prices
The parallel rate moves first
(depreciates), and this is
followed by a rise in
inflation...
600
500
400
Inflation rate /
(rhs)
300
200
Parallel rate
100
I&E rate
2014
NIGERIA
THE WORLD BANK
IBRD ⚫IDA | WORLD BANK GROUP
Sep
ΛΟΝ
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
2015
2016
In April 2017, the IEFX window is created
(an effective devaluation) and the supply of
FX improves. With greater ER predictability
the parallel rate comes down (appreciates),
and this helps to bring down inflation.
Similar dynamics since 2021. The parallel
rate and inflation move closely together,
but inflation is not as responsive to the IE
rate. This implies that a large part of the
"passthrough" between inflation and the
ER is already accounted for.
5
May
Jul
Sep
ΛΟΝ
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
2017
2018
Sources: FMDQ, NBS and Aboki rate
2019
May
Jul
Sep
ΛΟΝ
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
2020
2021
Sep
ΛΟΝ
Jan
Mar
May
Jul
2022
Sep
ΛΟΝ
Jan
Mar
2023
May
24
24
0
10
15
Percent
25
20
20View entire presentation