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LAGOS (Capital Markets in Africa) – Tanzania’s central bank cut its discount rate to 12percent from 16 percent on Monday 6th March 2017, to help spur lending and boost economic growth, the first time it has lowered borrowing costs since 2013. The cut, which the central bank said in a circular to commercial banks becomes effective on Monday, follows a steep drop in private sector credit growth last year. “The discount rate which is applicable to banks borrowing from the Bank of Tanzania as a lender of last resort will also be used to discount Treasury securities,” the circular said.
Morocco’s central bank maintained its key monetary policy rate at 2.25 percent on Tuesday 21st March 2017, and raised its forecast for inflation and growth slightly this year due to improved domestic demand and a rise in imported inflation. The Bank Al-Maghrib , which cut its rate by 25 basis points a year ago in response to declining inflation, added monetary conditions tightened slightly last year due to an appreciation of the real effective exchange rate of the dirham but this should moderate from a smaller increase in the nominal exchange rate compared with trading partners.
Nigerian Central Bank Keeps Key Policy Rate Unchanged at 14 percent on Tuesday 21st March The benchmark interest rate has been left unchanged for a fourth consecutive meeting to balance lifting the economy out of its worst slump in 25 years with fighting inflation that’s at almost double the government’s target. The slowdown in inflation in February was partly due to base effects, Emefiele said. Price pressures continue, and “loosening would exacerbate” them while tightening would portray the bank as “insensitive” to concerns about growth, he said. Nine of 10 MPC members voted to keep borrowing costs unchanged and one favored increasing the rate.
Reserve Bank of Malawi cut the policy rate, by 200 basis points from 24 percent to 22 percent on Friday 24th March 2017, a development buoyed by a sharp fall in inflation. It is the second time in five months that the monetary authorities have slashed the policy rate following a 300 basis point cut, from 27 to 24 percent, in November 2016. In a statement released on Friday, Governor Charles Chuka said the committee also agreed to maintain the amount of money commercial banks maintain with the central bank without earning interest, technically known as the liquidity reserve ratio, at 7.5 percent.
Ghana’s central bank slashed its benchmark interest rate on Monday 27th March 2017, by two percentage points to 23.5 percent, noting signs inflation was trending downwards, in a move that may help spur lending and business activity. The size of Monday’s rate cut came as a surprise. It was the biggest by the bank since December 2006 and follows a 50 basis-point reduction in January.
Kenya’s central bank left its Central Bank Rate at 10 percent on Monday 27th March 2017. The Central Bank of Kenya, which cut its rate by 150 basis points last year, also said it remains concerned about current uncertainties, including the impact of the government-imposed cap on lending and deposit rates by commercial banks on the effectiveness of monetary policy.
Rwanda’s central bank held its benchmark repo rate at 6.25 percent on Wednesday 29th March 2017. The National Bank of Rwanda (BNR), which cut its rate by 25 basis points in December in the first easing since June 2014, added that keeping its benchmark KKR rate at6.25 percent for the second quarter of this year would” cement the outcomes of its previous decisions.” Rwanda’s economy grew by 5.9 percent in 2016 and should continue to perform well in the first quarter of this year based on a 5.8 percent rise in the composite index of economic activities in the first two months of the year with total turnover up 15.9 percent in the same period.
Reserve Bank of South Africa held its benchmark rate unchanged for a sixth straight meeting on Thursday 30th March 2017, and said it may have reached the end of its policy-tightening cycle, even as the rand remains a risk to inflation. Five of the six Monetary Policy Committee members voted to keep the repurchase rate at 7 percent, and one favoured a 25 basis-point cut, Governor Lesetja Kganyago told reporters Thursday in the capital, Pretoria.
Egypt’s central bank kept its key interest rates unchanged on Thursday 30th March 2017 at a meeting of its Monetary Policy Committee, it said in a statement. The bank kept its overnight deposit rate at 14.75 percent and its overnight lending rate at 15.75 percent, the fourth consecutive meeting where it kept rates on hold since it aggressively hiked them in November. In a statement following the rate decision, the central bank said annual inflation was expected to ease as monthly inflation rates moderate.
Ghana names monetary policy expert Ernest Addison as central bank governor on Thursday 30th March 2017, a day after his predecessor resigned for personal reasons. Ernst Addison, who in the early 2000s was a leading architect of Ghana’s monetary policy, worked as a lead economist at the African Development Bank. His predecessor Abdul Nashiru Issahaku tendered his resignation after a year in the job and three months after the president who appointed him lost power.