The Kenyan central bank’s surprise 200bp interest rate hike, to 12.50%, on Tuesday was clearly aimed at shoring up the currency. There are other reasons to think that pressure on the shilling will ease over the coming months, meaning that the next move in rates is likely to be down, probably in the second half of 2024. In contrast, we think that the South African rand will depreciate next year as the improvement in the current account position seen in Q3 goes into reverse and fears about public debt build in the run-up to the election.
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