African central banks and the EM rate hike club

This week, the South African Reserve Bank joined its EM counterparts in tightening monetary policy, but we don’t think that policymakers in South Africa will raise interest rates as aggressively as central banks across Emerging Europe and Latin America. Elsewhere, a further fall in inflation last month and soft Q3 GDP figures mean that Nigeria’s central bank is unlikely to join the EM rate hike club any time soon.
Virag Forizs Emerging Markets Economist
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Africa Economics Weekly

Balance on South African MPC tipping towards rate hike

A raft of recent economic developments have shaken up our near-term views on monetary policy in South Africa, and we now expect a 25bp rate hike at next week’s MPC meeting. However, our forecasts for the next 12-18 months are still more dovish than most investors'.

21 January 2022

Africa Data Response

South Africa Activity Data (Nov.)

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Africa Data Response

South Africa Consumer Prices (Dec.)

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19 January 2022

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Africa Economics Update

SARB: lift-off for rates, but tightening cycle to be slow

The South African Reserve Bank fired the starting gun on monetary policy normalisation with a 25bp hike in the repo rate, to 3.75%, today amidst growing concerns about inflation risks. But the statement lends support to our view that interest rates will be raised more slowly than investors expect over 2022-23.

18 November 2021

Africa Data Response

Nigeria GDP (Q3)

The drop in Nigeria’s GDP growth to 4.0% y/y in Q3 points to the recovery in activity outside the key oil sector petering out. We think this will continue over the coming quarters, weighing on headline growth even as oil output gradually picks up.

18 November 2021

Africa Data Response

South Africa Activity Data (Sep.)

South Africa’s hard activity data for September point to output continuing to rebound in the sectors hardest hit by violent unrest in July. But the economy probably still contracted over Q3 as a whole, and we think that the Reserve Bank will keep the benchmark interest rate on hold this week to support the stumbling recovery and normalise monetary policy more slowly than most expect over 2022-23.

17 November 2021
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