In recent months, the African continent has been hit hard by inflationary pressures. In Eastern and Southern Africa, inflation peaked at 19.4% yearon- year in November 2022. It has since begun a slow and difficult deceleration: in July 2023, regional inflation fell to 15.5%, after peaking again at 20.6% in June. Nevertheless, this average masks major national disparities.
In South Africa, inflation slowed to 4.7% in July. Since June, it has been meeting the 3-6% target set by the Central Bank (SARB), which was able to maintain its key rate at 8.25% at the end of July. This is the first pause after 10 consecutive rate hikes since November 2021. The SARB has lowered its average inflation forecast for 2023 to 6%. However, upside risks remain due to the increased intensity of rolling blackouts in August and rising fuel prices.
In Kenya, inflation has also been meeting the target set by the Central Bank (2.5-7.5%) since July, with the Monetary Policy Committee having raised the key rate by 100 basis points to 10.5% in June. Despite the new Finance Bill, which has notably increased VAT from 8% to 16% on petroleum products since July, the Central Bank of Kenya believes that inflationary pressures will continue to ease over the coming months. This prompted a pause in the monetary tightening cycle at the beginning of August.
In Ethiopia, since the armistice ending the armed conflict in Tigray in November 2022, inflation has begun a slow decline, falling back below the 30% threshold since June. The Central Bank of Ethiopia recently announced a series of measures aimed at bringing inflation down to 20% within a year. These include capping annual growth in bank loans and reducing government borrowing capacity.
Inflation in Angola has followed a reverse trend. The rise in oil prices at the start of 2022 allowed the Kwanza to appreciate considerably and helped to reduce inflation. However, since June 2023, the rapid depreciation of the Kwanza and the partial abolition of petrol subsidies have once again fuelled inflationary pressures. After reaching a seven-year low in April, inflation rose again, reaching 13.5% in August.
BNP Paribas is regulated by the FSA for the conduct of its designated investment business in the UK and is a member of the London Stock Exchange. The information and opinions contained in this report have been obtained from public sources believed to be reliable, but no representation or warranty, express or implied, is made that such information is accurate or complete and it should not be relied upon as such. This report does not constitute a prospectus or other offering document or an offer or solicitation to buy any securities or other investment. Information and opinions contained in the report are published for the assistance of recipients, but are not to be relied upon as authoritative or taken in substitution for the exercise of judgement by any recipient, they are subject to change without notice and not intended to provide the sole basis of any evaluation of the instruments discussed herein. Any reference to past performance should not be taken as an indication of future performance. No BNP Paribas Group Company accepts any liability whatsoever for any direct or consequential loss arising from any use of material contained in this report. All estimates and opinions included in this report constitute our judgements as of the date of this report. BNP Paribas and their affiliates ("collectively "BNP Paribas") may make a market in, or may, as principal or agent, buy or sell securities of the issuers mentioned in this report or derivatives thereon. BNP Paribas may have a financial interest in the issuers mentioned in this report, including a long or short position in their securities, and or options, futures or other derivative instruments based thereon. BNP Paribas, including its officers and employees may serve or have served as an officer, director or in an advisory capacity for any issuer mentioned in this report. BNP Paribas may, from time to time, solicit, perform or have performed investment banking, underwriting or other services (including acting as adviser, manager, underwriter or lender) within the last 12 months for any issuer referred to in this report. BNP Paribas, may to the extent permitted by law, have acted upon or used the information contained herein, or the research or analysis on which it was based, before its publication. BNP Paribas may receive or intend to seek compensation for investment banking services in the next three months from an issuer mentioned in this report. Any issuer mentioned in this report may have been provided with sections of this report prior to its publication in order to verify its factual accuracy. This report was produced by a BNP Paribas Group Company. This report is for the use of intended recipients and may not be reproduced (in whole or in part) or delivered or transmitted to any other person without the prior written consent of BNP Paribas. By accepting this document you agree to be bound by the foregoing limitations. Analyst Certification Each analyst responsible for the preparation of this report certifies that (i) all views expressed in this report accurately reflect the analyst's personal views about any and all of the issuers and securities named in this report, and (ii) no part of the analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed herein. United States: This report is being distributed to US persons by BNP Paribas Securities Corp., or by a subsidiary or affiliate of BNP Paribas that is not registered as a US broker-dealer, to US major institutional investors only. BNP Paribas Securities Corp., a subsidiary of BNP Paribas, is a broker-dealer registered with the Securities and Exchange Commission and is a member of the National Association of Securities Dealers, Inc. BNP Paribas Securities Corp. accepts responsibility for the content of a report prepared by another non-US affiliate only when distributed to US persons by BNP Paribas Securities Corp. United Kingdom: This report has been approved for publication in the United Kingdom by BNP Paribas London Branch, a branch of BNP Paribas whose head office is in Paris, France. BNP Paribas London Branch is regulated by the Financial Services Authority ("FSA") for the conduct of its designated investment business in the United Kingdom and is a member of the London Stock Exchange. This report is prepared for professional investors and is not intended for Private Customers in the United Kingdom as defined in FSA rules and should not be passed on to any such persons. Japan: This report is being distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited, Tokyo Branch, or by a subsidiary or affiliate of BNP Paribas not registered as a financial instruments firm in Japan, to certain financial institutions permitted by regulation. BNP Paribas Securities (Japan) Limited, Tokyo Branch, a subsidiary of BNP Paribas, is a financial instruments firm registered according to the Financial Instruments and Exchange Law of Japan and a member of the Japan Securities Dealers Association. BNP Paribas Securities (Japan) Limited, Tokyo Branch accepts responsibility for the content of a report prepared by another non-Japan affiliate only when distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited, Tokyo Branch. Hong Kong: This report is being distributed in Hong Kong by BNP Paribas Hong Kong Branch, a branch of BNP Paribas whose head office is in Paris, France. BNP Paribas Hong Kong Branch is regulated as a Licensed Bank by the Hong Kong Monetary Authority and is deemed as a Registered Institution by the Securities and Futures Commission for the conduct of Advising on Securities [Regulated Activity Type 4] under the Securities and Futures Ordinance Transitional Arrangements. Singapore: This report is being distributed in Singapore by BNP Paribas Singapore Branch, a branch of BNP Paribas whose head office is in Paris, France. BNP Paribas Singapore is a licensed bank regulated by the Monetary Authority of Singapore is exempted from holding the required licenses to conduct regulated activities and provide financial advisory services under the Securities and Futures Act and the Financial Advisors Act. © BNP Paribas (2011). All rights reserved.
Recommended Content
Editors’ Picks
AUD/USD remains tepid following PBoC monetary policy decision
AUD/USD retraces its recent gains from the previous session against the US Dollar following the People’s Bank of China’s monetary policy decision on Friday. China’s central bank decided to keep its one- and five-year Loan Prime Rates unchanged at 3.10% and 3.60%, respectively, in the fourth quarterly meeting.
USD/JPY: Japanese Yen bulls remain on the sidelines despite strong Japan’s National CPI print
The Japanese Yen adds to the post-BoJ losses and drops to a five-month low against the USD. The Fed’s hawkish shift remains supportive of elevated US bond yields and undermines the JPY. A stronger-than-expected Japan’s National CPI keeps the door open for a BoJ rate hike in 2025.
Gold price oscillates in a range below $2,600 amid mixed cues
Gold price consolidates below the $2,600 mark following the previous day's good two-way price move and remains close to over a one-month low. The Fed signaled a cautious path of policy easing next year, which remains supportive of elevated US bond yields and assists the USD in standing firm near a two-year high.
Bitcoin's trajectory shows similarities with previous cycles as long-term holders book profits of $2.1 billion
Glassnode's Week on Chain report revealed the similarities between the current Bitcoin uptrend and previous cycles amid changing market conditions. Meanwhile, long-term investors began distributing their tokens at the $100K level, culminating in a new all-time high of $2.1 billion in realized profits.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.