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Friday, June 19, 2020 / 1:23 PM / United Capital
Research / Header Image Credit: Bloomberg
Monetary Policy in Africa:
Shooting for growth In the wake of the COVID-19 pandemic, global monetary
policy authorities have launched several expansionary programs, to cushion the
virus' negative economic effect on growth. African economies were no different,
as the pandemic posed a threat to decades of economic growth, which was
formerly buoyed by capital inflows, favourable commodity prices and large
aggregate demand.
Notably, the massive flood
of monetary stimulus in developed markets created room for African economies to
trim policy rates, amid the implication on foreign fund flows. This included
notable regional economic giants; Egypt (-300bps), South Africa (-275bps),
Ghana (- 150bps), Kenya (-150bps) and Nigeria (-100bps). Also, the Central Bank
of Egypt approved an EGP100.0bn package, to cover lending at preferential rates
to the manufacturing, agriculture, and contracting loans. Similarly, the
Central Bank of Nigeria launched a N1.1tn intervention fund to the
manufacturing and healthcare sectors. Elsewhere, the Central Bank of Kenya
lowered banks' cash reserve ratio by 100 bps to 4.25%.
For the rest of the year,
the current expansionary stance of African monetary authorities is unlikely to
change. As a result, we expect policy decisions to be focused on guiding
economies into recovery, as different countries lift restrictions and lockdowns
placed due to the pandemic.
Top African
Stories
Angola
May-2020
Net Reserves - June 22th
Egypt
Q1-2020
GDP Constant QoQ - June 29th
June-2020
Net Reserves - July 7th
Ghana
May-2020
M2 Money supply YoY - June 26th
Jun-2020
Markit/Stanbic Bank PMI - July 6th
Kenya
Jun-2020
Benchmark Interest Rate - June 25th
Q1-2020
GDP YoY - June 30th
Morocco
May-2020
CPI YoY - June 22nd
Q1-2020
GDP Report - June 21st
Nigeria
May-2020
Private Sector Credit YoY - June 29th
May-2020
Current Account Balance - June 20th
South
Africa
Apr-2020
CPI YoY - June 24th
Q1-2020
GDP YoY- June 30th
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