Slower inflation might delay, but not prevent, rate hikes

The latest data show a general slowdown in inflation across Sub-Saharan Africa. A variety of factors contributed to this easing, including lower commodity prices and the unwinding of the impact of previous currency falls. But while we think this might prompt some central banks to delay rate hikes, we do not think it will deter them altogether. Inflation remains close to the upper limit of central bank targets in South Africa, Kenya and Ghana, and each of these economies might need higher interest rates to continue to attract funding for their large current account deficits.