Central banks in Africa’s biggest economies are set to diverge from their emerging-market peers in Latin America and Europe over the next two weeks, as they maintain tight monetary policies to contend with persistent inflation.
Morocco, March 19 Morocco’s central bank is expected to remain cautious and keep the key interest rate steady even as inflation is at its lowest level in more than two years. The inflation rate unexpectedly climbed in January before easing slightly last month and is predicted to rise again. Mohamed Abu Basha of EFG Hermes Holding anticipates the CBN will stand pat, because the action last month has steadied the naira, which will help cool inflation. “Not only is the official rate stabilizing, but we are also seeing near-full conversion with the parallel market, in an addition healthy sign for the naira,” he said.
“The SARB is still very worried about, firstly, upside risks to inflation stemming from things like administered prices, a potential spillover into wage inflation because we’ve had a sharp rise in cost of living,” said Sanisha Packirisamy, an economist at Momentum Investments. “But also, from the global dynamic, because we’ve had the Red Sea conflict and there is still potential for an upside surprise on energy and food prices.
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