Nigeria’s inflation slowed again last month, and we think high real interest rates and a stable naira will allow disinflation to continue. The surprise rise in core inflation, however, is likely to delay interest rate cuts until September. The G20 meeting in South Africa yielded little on the government’s global debt reform ambitions. But SARB Governor Kganyago’s comments at the gathering strengthen our view that low domestic inflation is here to stay and will pave the way for more interest rate cuts, even if the inflation target is lowered, and a rally in local currency bonds.
We'll be online on Thursday to discuss further the macroeconomic implications if South Africa does lower its inflation target in a Drop-in. Sign up here
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