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SARB to keep loose policy stance to bolster recovery

Policymakers in South Africa kept their benchmark rate unchanged at 3.50% today and concerns about lasting economic damage from the pandemic and recent unrest appear to be growing. Against a backdrop of a sluggish recovery and weak inflation, we think the repo rate will stay on hold until well into 2022.
Virag Forizs Emerging Markets Economist
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Africa Economics Update

Ethiopia: Unlikely to replicate exceptional growth again

Ethiopia has been grappling with the fallout from its internal conflict and severe drought which, coming alongside spillovers from the war in Ukraine, will result in much weaker growth in the coming years and a sovereign debt restructuring is likely. Over the medium-term, we're doubtful that the government will be able to push through its ambitious reform agenda. Ethiopia’s growth miracle, in which the economy grew at rates of 8-12%, has come to an end.

10 August 2022

Africa Economics Weekly

Zambia’s creditors pledge debt relief, Kenya’s elections

News that Zambia’s official creditors agreed to provide debt relief is certainly encouraging and will unlock IMF funding. But the terms of the deal remain unknown, leaving in doubt that the country’s public debt will return to a sustainable path. Meanwhile, investors are on tenterhooks just as much as Kenyan voters ahead of Tuesday’s elections that are shaping up to be a close race. Oil and the Gulf Drop-In (9th Aug): What’s the outlook for oil prices and what does that mean for Gulf economic outperformance? Join economists from our Commodities and Emerging Markets teams for this 20-minute briefing. Register now.

5 August 2022

Africa Economics Update

Kenya: elections no cure for economic woes

Kenya’s general election scheduled for Tuesday is set against a challenging economic backdrop, and no matter the winner, the country’s outlook is likely to remain overshadowed by large macroeconomic imbalances and high public debt risks. Oil and the Gulf Drop-In (9th Aug): What’s the outlook for oil prices and what does that mean for Gulf economic outperformance? Join economists from our Commodities and Emerging Markets teams for this 20-minute briefing. Register now.

5 August 2022

More from Virag Forizs

Africa Data Response

South Africa Consumer Prices (Aug.)

South Africa’s headline inflation rate picked up to 4.9% y/y in August but the temporary factors behind the rise are unlikely to worry policymakers. Subdued core price pressures and the slow economic recovery mean that we expect the Reserve Bank to keep rates on hold on Thursday and well into 2022.

22 September 2021

Africa Economics Weekly

‘BIG’ push in SA, FX distortions in Nigeria, tourism woes

Momentum behind proposals for a basic income grant (BIG) in South Africa appear to be building, suggesting that the authorities are leaning towards providing more fiscal support. Elsewhere, Nigeria’s unorthodox foreign exchange policy seems to be disrupting activity but the chances of policymakers reversing course are very low. Finally, a recent virus wave in the highly-vaccinated island nation of Mauritius has dampened its recovery prospects, but other tourism-dependent economies in Africa will probably fare even worse.

17 September 2021

Africa Economics Update

CBN maintains interest rates and disruptive FX rules

Policymakers in Nigeria kept their benchmark rate on hold at 11.50% at today’s MPC meeting and will probably continue to do so over 2021-23. And the central bank’s insistence on maintaining a strong currency using disruptive foreign exchange rules is likely to come at an increasingly high economic cost.

17 September 2021
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