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Five of Africa’s Biggest Economies Poised to Hike Rates

Central banks in five African nations will likely raise interest rates in the coming weeks to tame inflation pressures that threaten to become entrenched. Those in another seven are expected to keep borrowing costs on hold as they assess the impact of supply shocks caused by Russia’s war on Ukraine. The Bank of Ghana is expected to raise its key interest rate to stem a decline in the cedi, which is trading close to a record low against the dollar, and rein in broad-based inflation that’s near a six-year high. Steady inflation in Africa’s largest economy will likely see the Central Bank of Nigeria leave rates unchanged as it continues to focus on spurring economic growth while monitoring the impact of geopolitical developments on inflation. Morocco’s central bank may be tempted to raise rates for the first time since 2008 to protect its currency peg with the dollar and tame inflation that’s expected to ratchet up due to the war in Ukraine. With year-on-year inflation slowing for a fourth consecutive month to its lowest level since November 2020, the Victoria-based Central Bank of Seychelles is set to maintain the key interest rate at 2%, prioritizing economic support over containing imported price increases.