The monetary policy tide turns

African central banks have turned up their hawkish noises over the past month. Policymakers in Nigeria and Kenya delivered their first interest rate hikes following pandemic-era cuts. In South Africa, the Reserve Bank stepped up the pace of its tightening cycle and, in Ghana, MPC members voted for another chunky interest rate rise. Price pressures are mounting in these economies, with inflation rates close to, or surpassing, upper target bounds. The spillovers from the war in Ukraine are only going to push up inflation rates further over the coming months. Reining in inflation expectations probably played a key role in MPC decisions in South Africa and Kenya. And we suspect that policymakers in the latter and in Ghana and Nigeria also had an eye out for their currencies, which have been under pressure lately. The hawkish shift in Africa probably has some legs and we expect further monetary tightening in the coming months.