Mozambique inflation slows for five straight months

Central Bank activities and inflation trends in Southern Africa have been the focus of attention in recent days, with Mozambique and Zimbabwe set to hold MPC meetings. Celio Hamide, Head of Sales, Global Markets at Standard Bank Group, provided insights on the matter in a recent interview. Starting with South Africa's latest MPC announcement, where no change in rates was expected despite minor inflation increases, the market seemed largely unsurprised. Although inflation is projected to rise in the coming months due to global fuel and food price hikes, no significant rate hikes are expected for the rest of the year. Turning to Mozambique and Zimbabwe, Hamide suggests that Mozambique may surprise with a rate cut during its MPC meeting, while Zimbabwe is likely to maintain its policy rate. Both countries have seen improvements in inflation and economic stability. Moreover, the recent agreement between Zambia and China to encourage the use of local currencies in trade and investment aims to strengthen cooperation in various sectors like infrastructure, agriculture, mining, and clean energy. This move is expected to reduce costs and exchange rate risks while boosting economic ties between the two countries.