Friday, June 19, 2020 / 1:23 PM / United Capital
Research / Header Image Credit: Bloomberg
Monetary Policy in Africa:
Shooting for growth In the wake of the COVID-19 pandemic, global monetary
policy authorities have launched several expansionary programs, to cushion the
virus’ negative economic effect on growth. African economies were no different,
as the pandemic posed a threat to decades of economic growth, which was
formerly buoyed by capital inflows, favourable commodity prices and large
aggregate demand.
Notably, the massive flood
of monetary stimulus in developed markets created room for African economies to
trim policy rates, amid the implication on foreign fund flows. This included
notable regional economic giants; Egypt (-300bps), South Africa (-275bps),
Ghana (- 150bps), Kenya (-150bps) and Nigeria (-100bps). Also, the Central Bank
of Egypt approved an EGP100.0bn package, to cover lending at preferential rates
to the manufacturing, agriculture, and contracting loans. Similarly, the
Central Bank of Nigeria launched a N1.1tn intervention fund to the
manufacturing and healthcare sectors. Elsewhere, the Central Bank of Kenya
lowered banks’ cash reserve ratio by 100 bps to 4.25%.
For the rest of the year,
the current expansionary stance of African monetary authorities is unlikely to
change. As a result, we expect policy decisions to be focused on guiding
economies into recovery, as different countries lift restrictions and lockdowns
placed due to the pandemic.
Top African
Stories
S.Africa’s bad debts may
hit highest ever level of 10% due to virus: South Africa’s bad debts could
hit 10% of bank lending this year according to itsbanking association director,
which would be the highest ever and well above the 6% seen during the 2008/9
financial crisis. Read moreWest African ministers
propose phased re-opening of borders: West African government ministers have
proposed re-opening borders between their countries in the first half of July
and allowing in travellers from other countries with low or controlled levels
of coronavirus spread by the end of July. Read moreZambia mining revenues
drop 30% due to COVID-19, Chamber of Mines says: Mining companies in
Zambia, Africa’s No.2 copper producer, have suffered a 30% drop in
revenue over the three months to April due to the COVID-19 pandemic and
the fallout could last for at least 12 months, the Chamber of Mines said
on Thursday. Read moreMadagascar offers $73
mln of loans to help small businesses through pandemic: Madagascar has
announced a stimulus package offering close to a million small businesses
secure loans at below market rates to help weather the impact of the
coronavirus outbreak, Read moreChina will exempt some
African countries from repaying certain loans: China will exempt some
African countries from repaying zero-interest rate loans due at the end of 2020, state
television reported on Wednesday, quoting President Xi Jinping’s speech at a
summit. Read moreEgypt secures financing
from AfDB to continue its solar growth ambition: Thirty international
infrastructure developers got behind this project, investing in Egypt’s massive
Benban solar park, which will be the largest in the world upon completion. Read more
Angola
May-2020
Net Reserves – June 22th
Egypt
Q1-2020
GDP Constant QoQ – June 29th
June-2020
Net Reserves – July 7th
Ghana
May-2020
M2 Money supply YoY – June 26th
Jun-2020
Markit/Stanbic Bank PMI – July 6th
Kenya
Jun-2020
Benchmark Interest Rate – June 25th
Q1-2020
GDP YoY – June 30th
Morocco
May-2020
CPI YoY – June 22nd
Q1-2020
GDP Report – June 21st
Nigeria
May-2020
Private Sector Credit YoY – June 29th
May-2020
Current Account Balance – June 20th
South
Africa
Apr-2020
CPI YoY – June 24th
Q1-2020
GDP YoY- June 30th
Visit African Markets in Proshare MARKETS
Related News
1. UK Mid-Sized Banks Face Significant Further Credit Charges
2. Limited Sovereign Rating Support from Central Bank Bond Buying
3. COVID-19 and SSA’s Manufacturing Sector: Operating in Difficult Times
4. UK Arrival Quarantine Delays Air Travel Demand Recovery
5. European Hotel Occupancy Rates Will Not Recover Until 2023
6. Coronavirus Causing Dramatic Differences in State Unemployment
7. SSA Equities Market Performance: Defying the odds
8. SSA: COVID-19 Budgets – Interest Payments vs Healthcare Spending
9. China Consumer Retailers Face Cash Flow Pressure
10. Sell in May and Go Away? – Revisiting Market History and COVID-19
11. China’s Expensive Bet on Africa Has Failed
12. Emerging Market Covenant Quality Scores Improve, But Risk of Cash Leakage
Rises
13. Viral Setback to Global Thinking – FBNQuest
14. Week-To-Date Update: Coronavirus across Africa
15. Unparalleled Global Recession Underway – Fitch
16. COVID-19 and the SSA Region: Entering a Period of Negative Growth
17. Coronavirus And The Coming Financial Revolution
18. Raining on China’s Parade
19. COVID-19: Developments In the Global Markets and The Impact On Nigeria
20. Unemployment Peaks in Lockdown Will be Extreme
