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South Africa’s Reserve Bank excepted to hike interest rate at next meeting

Published

3 years ago

May 14, 2022

In a bid to raise contraction of the sale and repurchase agreement rating as a result of inflation forecasts caused by rising costs in the second quarter of 2022, the South African Reserve Bank (SARB) is expected to lift its repo rate by 25 basis points in May and 50 basis points in Q3 at its next meeting.

In a survey conducted by renowned economists between, the country’s Central Bank has concluded that it would hike its repo rate by 25 basis points to 4.50% at its May policy meeting, almost in line with a poll carried out in March.

A majority in the survey predicted that the SARB will hike again in the third quarter by 50 basis points to 5.00% compared with only once in the third quarter to 4.75% in the March poll.

According to the survey, the SARB is then expected to pause in November at 5.00%, and then hike by 25 basis points every quarter, but pausing at 5.75% at the final policy meeting of 2023.

An economist and researcher with Gina Schoeman, in a research note, said hefty goods price rises have pushed inflation expectations above the 4.5% mid-point target and the SARB is understandably more concerned now about second-round effects.

“We forecast consecutive 25 basis point hiking with the door open for a 50 basis point move if second round effects surprise to the upside,” Schoeman said.

However, the SARB’s official aim is to keep inflation in the 3%-6% range while South Africa’s annual inflation rate rose to 5.9% in March from 5.7% in February, driven mainly by food and fuel price rises following Russia’s invasion of Ukraine.

Another economist, Mpho Molopyane, at Rand Merchant Bank, said if the reprieve were to be extended for another 10 months, this could shave 0.2 percentage point from this year’s headline consumer price inflation.

“The added benefit would be much lower second-round effects to core inflation and food prices, which could lead to a further moderation in headline CPI inflation,” said Molopyane.

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Moroccan annual inflation rises to 0.8% in November

Published

4 days ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

5 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”