(Bloomberg) --

Nigerian inflation slowed to a 10th-month low in October, giving the central bank scope to leave interest rates on hold next week.

Consumer prices increased 15.99% from a year earlier, compared with 16.63% in September, Statistician-General Simon Harry told reporters Monday in Abuja, the capital. The median estimate in a Bloomberg survey of seven economists was 16.2%.

While inflation has exceeded the 9% ceiling of the central bank’s target band for more than six years, the sustained slowdown in price-growth may give the monetary policy committee room to hold rates and aid the economy’s rebound from last year’s coronavirus-induced contraction. Economic output in Africa’s biggest oil producer has lagged the pace of population expansion of about 2.6% every year since crude prices fell in 2015.

Central bank Governor Godwin Emefiele has previously said the MPC will only make policy adjustments once the economy’s recovery is on a sustainable path. The median estimate of 11 economists in a Bloomberg survey is for interest rates to start rising in the first quarter of next year.

The central bank will announce its interest-rate decision on Nov. 23. 

The deceleration in inflation was largely helped by annual food-price growth, which slowed to 18.3% from 19.6% in September. Core inflation, which excludes farm produce, eased to 13.3%, compared with 13.7% in the previous month.

The slowdown is expected to continue unless there’s a shock in the system, Harry said. 

Africa’s largest economy has struggled to overcome a more than decade-long Islamist insurgency in the northeast and bandit attacks in the northwest that have disrupted farming and displaced millions.

READ: Covid, Conflict Put 12 Million Nigerians at Risk of Hunger

“Security challenges in key food-growing regions will keep a floor on further price declines,” said Ikemesit Effiong, head of research at SBM Intelligence, ahead of the release.

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