It, however, said the food prices continued to soar as it rose to 20.28 per cent in July, the highest year-on-year increase since 2009.
The bureau in the report said the latest drop in inflation was the sixth consecutive time this would be happening since January this year.
It reads in part, “ The inflation report for July 2017 reveals that headline inflation has again reduced to 16.05 per cent (year-on-year) in July 2017, compared to 16.10 per cent in June 2017.
“This makes it the sixth consecutive decline in the rate of headline year-on-year inflation since January 2017.
“On a month-on-month basis, the headline index increased by 1.21 per cent in July 2017, 0.37 per cent points lower from the rate of 1.58 per cent recorded in June.”
The report stated that urban index rose to 16.04 per cent year on year in July, down by 0.11 per cent points from 16.15 per cent recorded in June and rural index increased to 16.08 per cent in July from 16.01 per cent.
Food prices’ pressure, according to the report, continued into July as all major food sub-indexes increased.
Specifically, it stated that the food index rose by 20.28 per cent year on year in July, up by 0.37 per cent points from the 19.91 per cent rate recorded the previous month.
It attributed the rise in the index to the increase in the prices of bread, cereal, meat, fish, oils and fats, coffee, tea and cocoa, potatoes, yam and other tubers.
The report said, “The food index increased by 20.28 per cent (year-on-year) in July, up by 0.37 per cent from the rate recorded in June (19.91 per cent).
“This represents the highest year-on-year increase in food inflation since the beginning of the new series in 2009.”
Speaking on the drop in the inflation rate, a finance analyst attributed the decrease to various factors such as transparency in the foreign exchange market, intervention of the Central Bank of Nigeria in ensuring liquidity in the foreign exchange market.
A former Managing Director of Unity Bank Plc, Mr. Rislanudeen Mohammed, told our correspondent in a telephone interview that while interventions of the CBN had reduced the level of core inflation, such success had not been recorded in the area of the food index.
He said that more work needed to be done in increasing food production as well as addressing the impediments to agricultural production.
He said, “The pace of decline in inflation rate is largely due to transparency in the management of the foreign exchange market as well as the recent interventions of the CBN in that segment of the market.
“But while the core inflation seems to be coming down due to the transparency in the forex market, the food index is still a source of concern and it calls for more attention in that area.”