Markets are getting ahead of themselves by pricing in rate hikes in South Africa. Policymakers have explicitly said that they will not react to currency moves until they see a lasting effect on domestic inflation, which actually eased last month. We expect that the repo rate will be left on hold at 6.50% for the rest of this year. Elsewhere, Nigeria’s budget didn’t tell us much about actual fiscal policy in the country. And while Mozambique’s debt problems are rumbling on, the latest interest rate cut suggests that activity in the real economy is recovering.
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