Zambia debt deal, austerity in Kenya, SARB to hold?

This week saw Zambia edge closer to getting a debt restructuring over the line, but an agreement with official creditors suggested that there remain sticking points when it comes to negotiations with China. Elsewhere, Kenya’s parliament approved the 2023/24 budget this week that envisages further fiscal consolidation. Staying the course with austerity may prove difficult and, with FX reserves declining, the path to averting default is narrow. Finally, the South African Reserve Bank’s new projection model incorporates risk premia which have actually fallen back in recent weeks. With inflation also easing in May, there is a growing chance that the SARB keeps rates steady in July.