These 5 African central banks are expected to keep benchmark interest rates on hold, amid economic turmoil

Speaking to Bloomberg, a Sub-Saharan Africa Economist at the Bank of America, Tatonga Rusike, said the likes of Zambia and Kenya would leave their benchmark interest rates unchanged, seeing as inflation rates in these countries are showing signs of slowing down. However, countries in the second category who are more connected with the global markets, are more likely to hike rates.

He also noted that policy makers will need to consider portfolio outflows and exchange rate weaknesses when they decide on interest rates during their upcoming meetings.

As you should know, the war in Ukraine has combined with pandemic lockdowns in China and other global factors to wrought economic mayhem on Africa. Inflation rate, food and energy prices have all surged over the past few months, thus dampening the prospects of the continent’s post pandemic recovery.

Below are the projections on how some African central banks could retain their interest rates, according to Bloomberg.

Nigeria: The Central Bank of Nigeria’s monetary policy committee members are expected to retain interest at 11.5% when they meet on May 24. This would make it the 10th consecutive meeting when the members have voted to leave the rate unchanged. This is despite the fact that inflation rate has ticked over the past quarter to 15.9%.

Kenya: The Central Bank of Kenya’s MPC members will meet on May 30th, and they are expected to retain interest rate at 7% when they do. This would be the 14th consecutive meeting the MPC members would be voting to retain rate. And they are expected to do this in order to supporting as the East African country goes into its election season.

Mozambique: When MPC members of the Bank of Mozambique meet May 25, they are expected to retain rate at 15.25%. There are two reasons for this: first is to assess the impact of a 2% rate hike back in March, as well as the impact of a recent $456 million bailout by the International Monetary Fund.

Angola: MPC members of the Banco Nacional de Angola will meet on May 31st and they are expected to retain rate at 20%. This comes as inflation rate in the country has been slowing in recent months, with central bank governor, Jose de Lima Massano, assuring of further decrease in inflation rate.

Zambia: MPC members of the Bank of Zambia will meet on May 18 and they are expected to retain interest rate at 9%. This comes as policy makers are focused on slowing inflation rate.

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