Nigeria forced to hike rates, while SA & Kenya hold fire

The slump in the Nigerian naira this month forced the central bank to take drastic action. Interest rates were hiked for the first time in three years and the currency was devalued. But given that the currencies of other oil producing countries have fallen much further than the naira in recent months, more currency weakness and policy tightening appear to be on the cards. In contrast, easing inflation allowed central banks in South Africa and Kenya to keep interest rates on hold this month. That said, large current account deficits and strong core inflation in both countries suggest that monetary policy will need to tighten next year.