Next week’s MPC meeting in Egypt, coming at a time of soaring inflation and growing concerns over the commitment to policy reforms, will prove critical to restoring investors’ faith. Policymakers will need to deliver an aggressive interest rate hike. Elsewhere, the decision by Morocco’s central bank to raise rates this week was primarily aimed at tackling near-term inflation pressures but was also a further sign that officials are moving towards a floating dirham anchored by an inflation targeting framework. And finally, central banks in the Gulf shadowed the Fed’s dovish 25bp hike which, coupled with the recent fall in oil prices, is likely to weigh on bank lending over the coming months.
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