Monetary Policy In Africa: Singing A Global Chorus?


Friday, September 13, 2019   / 03:00PM / United Capital Research / Header Image Credit: Central Banking


For the better part of 2019, trends in global monetary policy are tilting increasingly towards an accommodative stance. Clearly, monetary authorities are quantifying the impact of geopolitical tensions, trade disputes and an imminent global recession.

Recently, the European Central Bank (ECB) bowed to pressures of a consistently weak EU growth, cutting its deposit rate to -0.5%, from -0.4% and resuming quantitative easing measures. As the world economy comes to terms with the regime of increasing dovish actions, emerging markets are caught between two major choices, join the easing bandwagon to stimulate growth, or keep interest rates high to attract foreign capital.

In the last two months, Central Banks across the major African economies seem to have chosen the former option, using the opportunity to address growth challenges and reduce the burden of high debt servicing cost. Notably, while Nigeria decided to keep its key policy rate unchanged at the Jul-19 meeting, its fellow economic giants, South Africa and Egypt slashed rates by 25bps and 150bps respectively. Also, other economies such as Botswana (-25bps), Mozambique (-50bps), Namibia (-25bps) and Mauritius (-15bps) followed by cutting policy rates.

Yet, the role of fiscal stimulus cannot be overemphasized. Without policy reforms to address infrastructural deficits, spur consumer spending, driving value-added production and manufacturing, the use of only monetary policy will be ineffective – like driving a car with no steering.


Top African Stories

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Looking Forward


Jun-19 Production Index MoM - September 20th

Jul-19 Trade Balance -  September 18th



Q2-19 GDP YoY - September 18th 

Aug-19 CPI YoY - September 18th 



Aug-19 GDP QoQ - September 23rd 



Policy Rate Decision - September 29th

Q2-19 GVA YoY - September 30th



Policy Rate Decision - September 24th

Aug-19 CPI YoY -  September 20th



Q2-19 GDP YoY - September 22nd


South Africa

Aug-19 CPI YoY- September 18th

Jul-19 Retail Sales Constant YoY - September 18th


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