Africa-Press. Attention is focused on the South African central bank’s interest-rate decision, amid a sharp split among economists over the next move. While the country’s main banking institution is expected to cut its 2026 inflation forecast to 3.3% from 3.5%—close to its new 3% target—analysts are divided over the outcomes of this policy, according to Bloomberg.
Thirteen analysts surveyed by Bloomberg expect rates to be kept unchanged at 6.75%, while eleven others predict a 25-basis-point cut.
The disagreement centers on whether policymakers will wait for clearer signals from the rand (the local currency) and oil prices, or move now, buoyed by the currency’s recent rise.
The decision by Africa’s largest economy will affect its neighbors Eswatini, Namibia, and Lesotho, whose currencies are pegged to the rand and are set to announce their own interest-rate decisions in the coming days.
Major African economies, including Egypt, Nigeria, and Kenya, are preparing to cut rates at their first policy meetings of the year, as price pressures continue to ease.
Bloomberg quoted Angelika Goliger, Ernst & Young’s chief economist for Africa, as saying: “With global growth expected to slow to around 3.1% this year, and with monetary stances diverging across advanced markets, African policymakers will need to balance the opportunity for monetary easing against persistent external vulnerabilities.”
According to Bloomberg, Société Générale emerging-markets strategist Gergely Ormosi said: “We see scope for a 100-basis-point rate cut in Egypt, 25 basis points in Kenya, and 200 basis points in Nigeria.”
Ormosi added: “Domestic inflation dynamics and inflation expectations allow for rate cuts, but the timing and size of these cuts are unclear, mainly due to potential shifts in global investor sentiment.”
He continued: “We expect that during 2026, rate cuts amounting to several hundred basis points will take place in Egypt, Ghana, and Nigeria, while we expect Kenya’s terminal rate to reach 8.5%, with downside risks.”
Mauritius and Uganda
As for other countries making decisions during the month, including Mauritius and Uganda, they are likely to remain cautious and keep interest rates unchanged to further assess the inflation path.
Ghana and Mozambique
Ghana’s central bank cut its policy rate—on Wednesday—by 250 basis points to 15.50%, while Mozambique’s central bank reduced its rate from 9.50% to 9.25%.
Inflation in Ghana—the West African country—fell to 5.4% in December, dropping below the central bank’s lower target bound of 6% for the first time since 2019.
In Mozambique, inflation is easing, while the real interest rate stands at 6.3%.
The U.S. Federal Reserve—on Wednesday—kept interest rates unchanged at a range of 3.5% to 3.75% at the first meeting this year of the Open Market Committee responsible for monetary policy at the U.S. central bank.
Fed Chair Jerome Powell said in a press conference following the decision that the U.S. federal budget deficit is “on an unsustainable path,” urging that it be “addressed quickly.”
