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Nigeria’s subsidy and new MPC, South Africa fiscal fear

The recent pick-up in oil prices will provide welcome hard currency income for Nigeria. But, with local fuel prices being kept stable, high oil prices and a weak naira also signal the return of the costly fuel subsidy. Nigeria’s central bank delayed next week’s interest rate decision, presumably to give the new leadership time to get to grips with the country’s economic problems. But it remains to be seen if this will lead to renewed impetus behind the policy shift. Finally, the South African Reserve Bank left rates on hold this week and developments on the fiscal front may prove to be key to how quickly the SARB will turn to cuts.

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