Financial markets bruised, central banks hawkish

Financial markets across Sub-Saharan Africa have struggled – and have underperformed their EM peers – since the global banking sector turmoil erupted. Amid broad risk-off sentiment, African sovereign dollar bonds have sold off nearly across the board and equities are down in much of the region too. Currencies have not been spared either, weakening against the US dollar almost without exception. And currency concerns will probably contribute to the hawkish mood among the region’s central banks for the time being. Policymakers in Nigeria hiked the benchmark rate this month and we think that central banks in Kenya and South Africa will follow suit later in the month.