AGS NEWS – Economic experts have indicated that Nigerians might need to wait for some time before experiencing the impact of the recent strengthening of the naira against the dollar on commodity prices.

Ayo Teriba, CEO of Economic Associates, explained that there is typically a delay between changes in the exchange rate and adjustments in prices.

He mentioned that commodities purchased at the previous exchange rate might take time to reflect the new rate in their pricing.

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Adeola Adenikinju, President of the Nigerian Economic Society, highlighted the economic rationale behind this delay.

He noted that sellers often hold onto their current stock, purchased at higher prices, until they can replace it with cheaper stock to avoid losses.

Adenikinju also mentioned that the actions of the Central Bank of Nigeria (CBN) in the coming weeks would influence market behavior regarding price adjustments.

Nigeria has been grappling with high inflation rates, primarily driven by soaring food prices.

Despite recent measures by the CBN to curb inflation, including raising interest rates, prices have yet to show significant declines.

Onakoya Adegbei, a Professor of Economics at Babcock University, explained that price adjustments often lag behind changes in production due to market expectations and production rigidity.

Traders at local markets echoed these sentiments, noting that prices have remained stable or even increased despite the recent strengthening of the naira against the dollar.

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They attributed this to the challenges they face, including high operational costs and infrastructural constraints.

The observations from economists and traders suggest that while the naira’s strengthening is a positive development, its effects on commodity prices may take some time to materialize fully.