Africa’s Central Bank Monetary Policy Rates and Foreign Exchange Reserves

LAGOS (Capital Markets in Africa) – Angola’s central bank kept its benchmark lending rate unchanged at 16 percent following a policy meeting on Friday 28th April 2017, the bank said in a statement posted on its website. The National Bank of Angola (BNA) has kept its key rate steady since June last year when it raised it to the current level to curb accelerating inflation. In 2016 the BNA rate was raised 500 basis points.

Botswana’s central bank left its benchmark lending rate unchanged at 5.5 percent on Friday 28th April 2017. The outlook for price stability remains positive as inflation, although increasing slightly in the short-term is forecast to remain within the 3 – 6 percent objective range in the medium term. Subdued domestic demand pressures and the modest increase in foreign prices contribute to the positive inflation outlook in the medium term.

Tunisia’s central bank raised its key interest rate by 50 basis points to 4.75 percent at an extraordinary board meeting held Tuesday 25th April 2017, to help ease rising inflationary pressures following a sharp fall in the dinar’s exchange rate and said it was closely following those pressures so it could undertake the appropriate actions on time. The central bank also raised the minimum savings rate that banks can offer by 50 points to 4.0 percent to boost the incentive to save and thus liquidity in the financial system. Tunisia’s banks are in need of liquidity given a weak level of savings in the country, the central bank said.

Namibia’s central bank left its benchmark lending rate unchanged at 7 percent on Wednesday 12th April 2017, saying the level was appropriate to support economic growth. “This rate remains appropriate to support growth, while maintaining the 1-to-1 link between the Namibian dollar and the rand,” said the central bank. The domestic economy slowed in 2016 compared to 2015; overall inflation rose during the first two months of 2017. Growth in private sector credit slowed over the same period.; the stock of international reserves remained sufficient to meet the country’s foreign obligations.

Uganda’s central bank cut its benchmark lending rate to 11 percent on Wednesday 12th April 2017 from 11.5 percent, saying core inflation would remain around the bank’s mid-term target over the next 12 months. The cut was the seventh in succession since last April as policymakers rein in borrowing costs from a peak of 17 percent reached after a surge in inflation.

Mozambique’s central bank cut its benchmark lending rate by 50 basis points to 22.75 percent, it central bank said on Monday 10th April 2017.The central bank said the rate cut reflected a favourable change in inflation and the exchange rate of the metical despite the risks of further price changes, worsening liquidity in the banking system and the resumption of foreign aid to the government.

Angola’s net foreign exchange reserves fell to $19.20 billion in March from $20.89 billion in February, according to data posted on the central bank’s website.

Egypt’s foreign reserves rose to $28.5 billion by the end of March, the highest level since March 2011, a cabinet statement and the central bank stated. The cabinet statement also said Egypt had attracted $17 billion of foreign currency inflows since the flotation of the pound in November. The Central Bank allocated $23 billion to finance foreign trade in the same period, the statement added.

Namibia’s foreign currency reserves fell to a seventh-month low in March as a sharp slide in neighbouring South Africa’s rand caused the central bank to purchase less of the currency to which it is pegged. Data from the Bank of Namibia showed reserves at N$22.6 billion ($1.68 billion) compared to N$22.7 billion in February. The Namibian dollar is pegged 1 to 1 against the rand.

Nigeria’s foreign exchange reserves rose to $30.80 billion by April 26 2017, their highest level since Sept. 2015, and central bank data showed. The increase could be attributed to a recent rise in global crude oil price and proceeds of Nigeria’s latest Eurobond issued in March. Nigeria’s dollar reserves stood at $30.31 billion a month ago. They have risen 18.1 percent since the start of the year but are still far off their peak of $64 billion, hit in August 2008.

South Africa’s net foreign reserves fell to $41.419 billion in March from $41.506 billion in February, the Reserve Bank said reported. Gross reserves edged down to $46.588 billion from $46.722 billion, the central bank data showed. The forward position, which represents the central bank’s unsettled or swap transactions, fell to $2.867 billion in March from $2.97 billion in the previous month.