The Bank of Namibia (BoN) is among five Central banks expected to raise interest rates in the coming weeks to tame inflation pressures that threaten to become entrenched according to a Bloomberg report.
Seven other central banks are expected to keep borrowing costs on hold as they assess the impact of supply shocks caused by Russia’s war on Ukraine.
Namibia, April 13
Repurchase rate: 4%
Inflation rate: 4.5% (February)
The Bank of Namibia is expected to follow in the footsteps of its neighbor South Africa and increase rates by a quarter-point.
Namibia has “a subordinated monetary policy,” meaning it disregards domestic economic factors and instead adjusts rates in the interest of maintaining its currency peg with South Africa,” said Namibian Economist Mally Likukela.
Angola, March 31
BNA rate: 20%
Inflation rate: 27.3% (February.)
Angola’s MPC is likely to keep borrowing costs steady as fuel subsidies and a rally in the kwanza, the world’s best performer against the dollar this year, help rein in inflation.
“Pausing will enable policy makers to assess the impact of global price shocks on items such as agricultural commodities, which are expected to have a major impact on inflation,” said Carlo Rosado Carvalho, Economist at Universidade Catolica de Angola.
Mozambique, March 30
MIMO interbank rate: 13.25%
Inflation rate: 6.8% (February)
Single-digit inflation in Mozambique will likely see policy makers keep rates on hold as they monitor the impact of global developments.
“Still, if imported inflation builds up, the Banco de Mocambique might have to take an increasingly hawkish tone later this year,” said Fausio Mussa, Chief Economist at Standard Bank’s Mozambique unit.
Seychelles, Est. March 29
Policy rate: 2%
Inflation rate: 2.98% (February)
With year-on-year inflation slowing for a fourth consecutive month to its lowest level since November 2020, the Victoria-based Central Bank of Seychelles is set to maintain the key interest rate at 2%, “prioritizing economic support over containing imported price increases,” said Shaktee Ramtohul, a Financial Analyst and Consultant.
Kenya, March 29
Central bank rate: 7%
Inflation rate: 5.1% (February)
Inflation target: 5% +/- 2.5 ppt
With inflation at a 16-month low and within the central bank’s target band, Kenyan policy makers will likely keep the key rate unchanged for a 13th straight meeting.
“That’s as they assess the impact of a depreciation in the shilling and the spillover effects from the war in Ukraine on inflation,” said Renaldo D’Souza, Head of Research at Nairobi-based Sterling Capital.
