Banking

LAGOS (Capitla Markets in Africa) – Emerging-market central banks are boosting investors’ confidence in their ability to withstand shocks by pursuing orthodox economic policies and ignoring political pressures. As the economic crisis in Turkey this week threatened to roil markets in developing nations, policy makers from Jakarta to Buenos Aires reacted with a steady hand. Their response — raising interest rates, selling reserves or just providing reassurance that they’re paying attention — stands in stark…

JOHANNESBURG (Capital Markets in Africa) – A jump in South Africa’s interest-rate bets may be little more than a reflection of the turmoil in Turkey. Forward-rate agreements, used to speculate on interest rates, increased on Monday after the rand sagged — at one point dropping the most since the 2008 financial crisis — as Turkey’s crisis sapped demand for emerging-market assets. But the South African Reserve Bank has ignored bouts of rand weakness in the past,…

JOHANNEBURG (Capital Markets in Africa) – Who’s afraid of a weaker rand? Not the South African Reserve Bank, according to a new study examining the pass-through of currency fluctuations to inflation. The authors set out to find out why the correlation between the exchange rate and price growth has weakened in the past two decades, which coincided with South Africa adopting an inflation-targeting policy. They conclude that the central bank’s credibility is the main determinant. “Improving monetary-policy…

LAGOS (Capital Markets in Africa) – The Nigerian central bank is “in the mood” for tightening and will increase its main interest rate if inflation doesn’t slow, Deputy GovernorJoseph Nnanna said. “Every member of the Monetary Policy Committee is certain that the monetary policy rate should increase if inflationary pressures build up,” Nnanna said Monday, speaking on the sidelines of a conference in the resort city of Sharm El-Sheikh in Egypt. “Our intention is to ensure that the…