* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?RIC=GHCBIR%3DECI Ghana interest rate forecasts
* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?RIC=KECBIR%3DECI Kenya rate forecasts
* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?RIC=NGCBIR%3DECI Nigeria rate forecasts
By Vuyani Ndaba
JOHANNESBURG, May 21 (Reuters) – Central banks in Ghana and Kenya will keep interest rates on hold next week to check quickening inflation while foreign exchange reforms taking shape will leave Nigeria’s central bank on the sidelines too, a Reuters poll found.
Twelve analysts polled by Reuters were unanimous in saying interest rates would be left at 14.5% and 7.0% in Ghana and Kenya respectively. Just one of 10 said Nigerian rates would be lifted by 50 basis points to 12.0% next week.
Razia Khan, head of research for Africa and Middle East at Standard Chartered, said the focus in Nigeria would be on reforms to the forex market and fuel subsidies.
Nigeria – Africa’s biggest economy – has had multiple foreign currency exchange rates for the past few years which has undermined investment as businesses struggle with dollar shortages and investors hope the rates will converge soon.
The problem was caused by a commodity price slump around 2014, though analysts say the situation is much better now as higher oil prices and the weaker naira will likely rebalance the current account.
Standard Chartered’s Khan said in neighbouring Ghana the early rollouts of revenue measures, aimed at narrowing the fiscal deficit, including a higher value added tax rate and a fuel levy, would pressure inflation in the months ahead.
In Kenya, the International Monetary Fund and Kenyan authorities reached an agreement this week on economic policies, concluding the first review of its 38-month extended fund facility and extended credit facility financed programme.
Citi wrote that with a slow decline in the fiscal deficit and rising multilateral support the Central Bank of Kenya (CBK) should be under less pressure to tighten monetary policy in the medium term.
However, a combination of rising oil prices and a quick re-bound in growth could mean inflationary pressures start to rise in the second half of 2021, which may push the CBK into modestly raising its policy rate this year.
The poll suggested the three central banks were likely to keep rates at current levels for the rest of this year. In South Africa, a Reuters poll last week said borrowing costs there would be left at 3.5%. (Reporting by Vuyani Ndaba; Editing by Toby Chopra)
(c) Copyright Thomson Reuters 2021. Click For Restrictions – https://agency.reuters.com/en/copyright.html
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent. Sign up here.