Economy

LAGOS (Capital Markets in Africa) – China took steps to limit weakness in the yuan, providing some stability to global financial markets in the wake of Monday’s rout, and said it won’t depreciate the currency to be competitive. The People’s Bank of China on Tuesday set the daily currency fixing stronger than analysts expected and announced the planned sale of yuan-denominated bonds in Hong Kong. The moves, which came after the U.S. labeled the country…

JOHANNESBURG (Capital Markets in Africa) – Fresh from being reappointed for another five years, South African Reserve Bank Governor Lesetja Kganyago made it clear that he will keep on pursuing his mandate of low inflation and suggested the current target band may even be too high. This comes after Kganyago and the central bank came under renewed criticism in recent months from labor unions and some senior members of the ruling party who want borrowing…

CAIRO (Capital Markets in Africa) – Egyptian inflation eased unexpectedly to its lowest rate in more than three years, with some analysts predicting a greater chance of the central bank cutting interest rates in the coming months. Consumer prices in urban parts of Egypt rose by an annual 9.4% in June, compared with 14.1% in May, the state-run statistics agency, CAPMAS, said Wednesday. On a monthly basis, food prices declined 2.2%. Although the extent of the deceleration was…

JOHANNESBURG (Capital Markets in Africa) – The risk of South Africa’s struggling state power utility going bust doesn’t appear to faze one of its biggest creditors: the World Bank. The Washington-based lender agreed to lend Eskom Holdings SOC Ltd. $4 billion almost a decade ago to boost its generation capacity and avoid a repetition of rolling blackouts. Mismanagement and construction cost overruns have seen the state of the utility’s finances going from bad to worse since then,…

TUNIS (Capital Markets in Africa) – Fitch Ratings affirmed at ‘B+’ Tunisia’s long-term foreign and local currency Issuer Default Ratings, with a ‘negative’ outlook. It indicated that the ratings are constrained by fiscal and current account deficits, elevated public and external debt levels, a challenging political environment and subdued economic growth. The agency expected economic activity in the 2019-21 period to be supported by higher investments and exports, strong tourism activity, as well as robust…

RABAT (Capital Markets in Africa) – The Institute of International Finance projected Morocco’s real GDP growth rate to decelerate from 3% in 2018 to 2.3% in 2019, mainly due to a 2% contraction in the agricultural sector’s activity. In parallel, it forecast non-agricultural growth to accelerate from 2.9% in 2018 to 3.1% in 2019. It considered that downside risks to the growth outlook include volatile weather conditions, as well as lower economic growth in Europe,…

LAGOS (Capital Markets in Africa) – Fitch Ratings indicated that the public debt level in Sub-Saharan African (SSA) countries has significantly increased, as the median debt level of the 19 Fitch-rated SSA sovereigns doubled from 27% of GDP at the end of 2012 to an estimated 56% of GDP at end-2018. It noted that SSA sovereigns have used some of the fiscal space that was afforded by the Highly Indebted Poor Countries initiative to boost…