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Friday, January 22, 2020/ 01:00PM / United Capital Research /
Header Image Credit: Brand Spur
In the light of apparent
fiscal policy limitations, and in a bid to keep the economy running in the wake
of the global pandemic, government authorities used the monetary policy
measures available to them to salvage their economies from the potential damage
of the Covid-19 outbreak while the government focused on providing health care
services and other forms of fiscal support to their economies.
Monetary policy took
centre stage in many economies as central banks moved to provide emergency
support facilities while adopting a broadly loose policy stance in line with
global realities. Looking through the spectrum, reductions in policy rate was
as high as 500bps in S/Sudan and Zambia, close to 300bps in S/Africa and the
Rand Zone, 200 bps in Uganda, 150 bps in Ghana and 200bps in Nigeria
(accompanied by massive liquidity injection via OMO maturities. Other measures
included direct facilities intervention to SMEs and businesses directly
affected by the pandemic, moral suasion to banks to increase or implement a
moratorium on existing credits to buffer job losses and limit the financial
burden on corporates.
In 2021, we expect
monetary policy actions to remain broadly accommodative to spur growth and
limit the impact of the pandemic from evolving into a W-shaped growth outcome
in the face of limited vaccination for Africans as well as fiscal policy
vulnerability. We imagine that monetary authorities will further ease or
maintain policy rates at current level till Q2-2021 to allow the economy to
recover fully before contemplating tightening from Q3 -2021.
Top African Stories
Looking
Forward
Angola
MPC
Meeting-January 28th
Ghana
Dec-2020
PPI YoY-January 22nd
Dec
2020 MPC Interest Rate Decision=January
25th
Kenya
Q3-2020
CPI YoY-January 29th
Morocco
Dec-2020
Inflation Rate YoY- January 22nd
South
Africa
Dec-2020
PPI YoY-January 28th
Dec-2020
Money Supply YoY-January 29th
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