Can SSA's Biggest Economies Join The 2nd Monetary Easing Cycle?

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Friday, September 20, 2019   / 03:00PM / United Capital Research 

 

Lately, global central banks are becoming increasingly accommodative with fears of a global economic slowdown gaining momentum. First, the European Central Bank (ECB) delivered its first rate cut in 2019, easing policy rate from -0.4% to -0.5%, and relaunched its bond-buying program in order to support the Eurozone's faltering economy. Similarly, the U.S Federal Open Market Committee delivered its second 25bps rate cut in less than 2months.

In Africa, the two biggest economies in the Sub-Sharan Africa region, Nigeria and South Africa, despite battling with sluggish growth, seemed reluctant to join the second round of the easing exercise. For South Africa, oil market volatility and its direct impact on energy prices continue to pressure headline inflation, thus, compelling the reserve bank to hold its key policy rate unchanged at 6.5% on Thursday, 19th Sept. 2019. Similarly, Nigerian MPC which is currently holding its policy meeting is broadly expected to keep rates unchanged but for a different reason. Nigeria's need to continue to attract Foreign Portfolio Inflows to ease pressure on the exchange rate is seen as a major concern amid increasing uncertainty in the global space.

While both economies are in dire need of faster output growth, the current structure of both markets constrains the likelihood of a more accommodative monetary policy in the absence of reforms.


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Looking Forward

Angola

Aug-19 Net Reserves - September 25th 

Sep-19 Policy Rate Decision - September 27th 

 

Egypt

Jun-19 Production Index MoM - September 25th

Jul-19 Trade Balance -  September 30th

 

Ghana

Jul-19 M2 Money Supply - September 30th 

 

Senegal

 Q2-19 GDP Report- September 23rd 

 

Mauritius

 Q2-19 GDP Report - September 30th

 

Morocco

Policy Rate Decision - September 24th

Q2-19 GDP Report - September 30th

 

Nigeria

Q2-19 Current Account - September 27th

Aug-19 Private Sector Account - September 30th 

 

South Africa

Aug-19 Trade Balance - September 30th 

Aug-19 Private Sector Credit - September 30th 


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