Nigeria's Year-on-Year Consumer Price Inflation

Inflation dropped to 7.1 percent in February from 8.0 percent the previous month, the National Bureau of Statistics (NBS).

The composite consumer price index however, rose by 0.8 percent to 157.6 in Feb. from 156.4 a month earlier, the agency said.

"The increase in the index was caused mainly by rise in the prices of some food items," the NBS said. "The urban all items index rose by 1.0 percent, while the corresponding rural index rose by 6.0 percent over the period."

The bureau said the 12-month moving average of consumer price inflation dipped to 7.7 percent from 8.0 percent in the previous month.

The top African oil producer is targeting a 9.0 per cent year-on-year inflation at the end of the year.

Bankers are anticipating a cut in the central bank benchmark Monetary Policy Rate (MPR) by up to 200 basis points from 10 percent due to easing inflation.

Nigeria, the second biggest economy in the sub-Saharan Africa, ended last year with an 8.5 percent inflation figure, but analysts had feared that a surge in pre-election spending could fuel price rises this year.

Inflation has remained relatively low despite surging liquidity in the banking system because of active liquidity management by the central bank and a strong naira currency backed up by high oil prices.