The Manufacturing Purchasing Managers’ Index rose slightly, indicative of a gradual recovery of output growth.
The Central Bank of Nigeria disclosed this in a report of the recently held Monetary Policy Committee meeting.
The report stated that the continued growth in net domestic assets was largely driven by increased claims on the Federal Government and other public nonfinancial corporations, private sector and state and local governments.
What the CBN is saying
The CBN Governor, Godwin Emefiele, said, “The committee also noted the continued improvement in the Manufacturing Purchasing Managers’ Index, which though remained below the 50-index point benchmark, rose to 47.3 index points in October 2021 from 46.6 index points in September 2021.
“This improvement indicated a gradual recovery of output growth, driven largely by the increase in new orders associated with rising aggregate demand and upswing in business activities.
“The Non-Manufacturing PMI, however, declined to 47.5 index points in October 2021 from 47.8 index points in September 2021 as uncertainties persisted around the poor security situation.”
He said the committee noted that headline inflation (year-on-year) continued to moderate in October, falling to 15.99% from 16.63% the previous month, marking the seventh consecutive month of drop.
The drop was attributed to a little drop in both the food and core components, which fell to 18.34% and 13.34% in October 2021, respectively, from 19.57% and 13.74% in September 2021.
Despite its gradual drop, inflation remained over the bank’s implicit tolerance range of 6 to 9% and above its benchmark policy rate of 11.5%.
According to the CBN, the committee observed changes in monetary aggregates and found that broad money supply increased by 7.10% in October, compared to 4.72% in September. It said this was driven by growth in net domestic assets by 9.12% in October, compared to 10.71% recorded in September.
According to the report, net foreign assets, on the other hand, contracted moderately by -1.50% in October, compared with -20.85% in the preceding month.
It said in the financial markets, money market rates oscillated within the standing facilities corridor, reflecting the prevailing liquidity conditions in the banking system