Banking

KIGALI (Capital Markets in Africa) – Changing weather patterns are pushing up food prices and will drive inflation in Rwanda for the first few months of this year, central bank Governor John Rwangombwa said. Unexpectedly heavy rains in the second half of 2019 caused some crop damage and food inflation reached 23.8% in December, the highest in almost three years.  “Because of the bad rains we had in the last quarter of 2019 we expect inflation in…

LAGOS (Capital Markets in Africa) – Nigeria turned the screws even tighter on lenders by increasing the amount of money they need to park with the central bank for the first time in almost four years in an effort to tame inflation. The West African nation’s central bank raised the cash-reserve requirement for lenders to 27.5% of total deposits, from 22.5%, to curtail excess liquidity in the banking sector, Governor Godwin Emefiele told reporters Friday…

LAGOS (Capital Markets in Africa) – In August, Google announced a global crackdown on Android apps that offer short-term loans, saying it wanted to protect consumers from what it called “deceptive and exploitative” terms. But five months later, payday-style applications offering fast money for one or two weeks are still easy to find in many countries on Google Play, the company’s marketplace for Android apps. Some charge interest rates that can exceed 200% annualized. Lending apps…

LONDON (Capital Markets in Africa) – A closely watched measure of U.K. economic activity unexpectedly surged to the highest level since 2018 in January, potentially undermining the case for a Bank of England interest-rate cut next week. IHS Markit’s flash index for output across the whole economy jumped to 52.4 as firms cited reduced political uncertainty in the wake of Boris Johnson’s decisive election victory. That’s up from 49.3 last month. The Purchasing Managers Indexes had…

ACCRA (Capital Markets in Africa)~ – Former UBS Group AG trader Kweku Adoboli fought to avoid deportation from the U.K. to the nation of his birth after his conviction for a $2.3 billion loss at the Swiss bank. Now, he is seeking a comeback in Ghana with a plan to kick-start its mortgage-backed bond market. The 39-year-old was extradited to the West African country in November 2018 after being jailed in 2012. He spent the first nine…

JOHANNESBURG (Capital Markets in Africa) – South Africa’s central bank didn’t consider easing policy by more than 25 basis points last week, despite the flexibility it has with interest rates, Governor Lesetja Kganyago said.   “As a small open economy, we don’t have the problem that the developed world has where monetary policy is at the zero lower- bound, we have the flexibility to do things,” Kganyago said in an interview with Bloomberg TV at…

NEW YORK (Capital Markets in Africa) – In the court of investor opinion, the verdict is in. The Federal Reserve is guilty of quantitative easing. Never mind that Chairman Jerome Powell tells everyone his efforts to shore up funding markets are “in no sense” QE. Try as policymakers may, they’ve lost the ability to convince people that Treasury purchases aren’t at least partially why the Dow Jones Industrial Average is up almost 4,000 points since late…