Banking

LAGOS (Capital Markets in Africa) — Central banks are set to spend 2021 maintaining their ultra-easy monetary policies even with the global economy expected to accelerate away from last year’s coronavirus-inflicted recession. In Bloomberg’s quarterly review of monetary policy that covers 90% of the world economy, no major western central bank is expected to hike interest rates this year. China, India, Russia, and Mexico are among those predicted to cut their benchmarks even further. Only…

CASABLANCA (Capital Markets in Africa) — Morocco held its benchmark interest rate at an all-time low of 1.5%, awaiting signs the economy is recovering from the pandemic. The move by the central bank Tuesday was expected after the North African nation signaled it may dial back a recent borrowing spree, freeing up liquidity in the domestic debt market and blunting the need for an immediate cut. It’s the second consecutive hold after a record easing…

LAGOS (Capital Markets in Africa) — It’s not just the pandemic that’s putting Nigerian bank earnings at risk: Competition for customers in the recession-hit economy is driving interest rates on loans lower. Mid-tier lender FCMB Group Plc is forecasting that first-quarter earnings will fall more than 20% as rates decline, pushing the Lagos-based bank to accelerate lending to compensate for the profit squeeze. Guaranty Trust Bank Plc, Nigeria’s biggest bank by market value, reported flat interest income for the…

LONDON (Capital Markets in Africa) — Global central banks are embarking on fresh waves of bond-buying to fight the fallout from the pandemic, despite mounting claims that the once-mighty policy is losing its power to boost the economy. The U.S. Federal Reserve, Bank of England, Bank of Japan and the European Central Bank have splurged $5.6 trillion this year alone on quantitative easing, according to Bloomberg Economics. The ECB is expected to increase its own purchase plans by…

LAGOS (Capital Markets in Africa) — African nations should tap more domestic savings for their funding needs and develop their own financial markets to avoid the complications and “bias” that comes with raising international debt. That’s according to Agence Française de Developpement Chief Executive Officer Remy Rioux, who is urging sovereign borrowers to turn to long-term, concessional financing rather than rely on short-term, expensive credit from private institutions. Part of the risk premium attached to African…

LAGOS (Capital Markets in Africa) — The global migration away from the London interbank offered rate hit a critical juncture Friday, with a new legal protocol opening the way for a wider adoption of alternative benchmarks. The International Swaps and Derivatives Association, or ISDA, unveiled standardized contractual language, which will allow firms that haven’t fully prepared for Libor’s exit to incorporate transition clauses into their agreements. Lawyers say the move by the trade group that oversees the global…