Monetary Policy Committees (MPC) of 7 African countries namely: Nigeria, South Africa, Zambia, Egypt, Ghana, Kenya and Angola were scheduled to meet over May-19 to decide on the best monetary policy recommendations for their various economies.
However, four of those MPCs met with only Zambia taking a different turn last week.
Specifically, MPC in Nigeria, South Africa and Egypt left rates unchanged at 13.5per cent, 6.75per cent and 16.75per cent respectively while the Zambian MPC took a different turn as it raised its policy rate by 50 basis points (bps) to 10.25per cent in a quest to quell inflationary pressures.
On the global scene, the minutes of the US Fed’s meeting that was held earlier this month relayed the Federal Open Market Committee’s intention to adopt a patient approach to determining future adjustments to rates, at least in the near term.
Dealers said this relatively accommodative stance is positive for flows to emerging markets as carry trade becomes attractive.
With this backdrop, “we do not expect a broad dramatic change in monetary policy stance by Apex banks in Africa. “Yet, this does not single out inflationary pressures emanating from drought, upticks in food prices and increment fuel prices, that could possibly sway the various MPC’s decisions,” one dealer stated.
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