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Bank of Ghana new gov says top priorities are inflation, rates

26 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ACCRA (Reuters) – New Bank of Ghana’s Governor Abdul-Nashiru Issahaku said in his first domestic speech on Tuesday that bringing down inflation and reducing interest rates were his main priorities but that achieving those goals would take some time.

The Bank also remains committed to enabling commercial banks to scale up lending to small and medium sized businesses and other sectors in order to boost gross domestic product growth, Issahaku said.

 

(Reporting by Matthew Mpoke Bigg; Editing by Joe Bavier)

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Burundi’s inflation eases to 4.3% in March

20 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

KIGALI (Reuters) – Burundi’s year-on-year inflation eased to 4.3 percent in March from 6.7 percent in February due to falling food costs, official data showed on Wednesday.

Food inflation in the 12 months to March slowed to 6.4 percent from 10.9 percent in February, the country’s Institute of Economic Studies and Statistics (ISTEEBU) said.

Despite falling inflation, the economy has been battered by a year-long political crisis and associated violence, mainly in the capital. Western donors have reduced vital aid leaving the poor nation more dependent on its modest tea and coffee exports.

Burundi’s economy shrank by 7.2 percent in 2015 and is only expected to expand by 3.4 percent in 2016, according to the International Monetary Fund in a recent report.

 

 

(Reporting by Patrick Nduwimana; Writing by Edmund Blair, editing by David Evans)

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Nigeria’s inflation rises to almost 4-year high in March

12 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigeria’s annual inflation rose to a near four year high of 12.8 percent in March from 11.4 percent in February, driven by a rise in food prices, the National Bureau of Statistics said.

Africa’s biggest economy is facing its worst economic crisis in decades fueled by the collapse in crude prices, which has slashed government revenues, weakened the currency and caused growth to slow. The economy grew 2.8 percent last year, its slowest pace in decades.

Food prices, which account for the bulk of the inflation basket, rose by 1.4 percent points to 12.7 percent in March, the bureau said on its website.

“The higher price level was reflected in faster increases

across all divisions,” the bureau said in a report.

The NBS expects inflation to end the year at 10.16 percent, above the central bank’s target upper limit of nine percent. The price index ended at 9.55 percent last year.

 

(Reporting by Ulf Laessing; Editing by Tom Heneghan)

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Bank of Ghana governor plans to fight inflation, boost growth

12 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ACCRA (Reuters) – Ghana’s new central bank governor said on Monday his top priority was to fight inflation, but he also wanted to pursue new policies to boost local business growth.

In his first interview since being named Bank of Ghana governor last week, Abdul-Nashiru Issahaku pledged full commitment to an International Monetary Fund (IMF) programme aimed at stabilising the economy.

“My focus is to work assiduously to achieve our core responsibility of ensuring price stability,” Issahaku said.

Consumer inflation in the West African country, an exporter of gold, cocoa and oil, eased to 18.5 percent in February from 19 percent in January.

But it remains above the government’s upper target of 15.7 percent, while the central bank’s benchmark 91-day Treasury bill rate stood at 22.7713 percent on Friday.

At the same time, gross domestic product growth has fallen from around 14 percent in 2011 to 4.1 percent last year, in part because of a global slump in commodity prices.

President John Mahama promoted Issahaku from deputy governor when his predecessor, Henry Kofi Wampah, stepped down last month ahead of what is expected to be a closely fought election in November when Mahama will run for a second term.

Issahaku takes over at a crucial time for the bank, one year into the IMF programme. Some fear the election will put pressure on policy makers, including the central bank, which is independent, to loosen financial controls.

It also comes as the bank’s main lending rate stands at 26 percent, leading to complaints by many in the business community that it is stifling growth.

Issahaku, a member of the government’s economic management team, said he would work with the Finance Ministry and other agencies to maintain spending limits. “Elections or no elections, I remain committed to the programmes and we cannot afford to derail,” he told Reuters.

But he said Ghana had to begin immediately to “start to think out of the box about propelling growth of local businesses and creating employment.”

Ghana was one of Africa’s economic stars for years. Since the 2012 election, however, it has been tackling a budget deficit, high levels of public debt, inflation and a currency that fell sharply in 2014 and 2015.

Ghana’s cedi currency withstood a seasonal first quarter pressures to rally against the dollar in a sign of the impact of the IMF programme and bank policies.

Issahaku said he wants to sanitize the financial sector, especially micro finance firms, and enhance the regulator’s transparency and capacity. To boost growth, he would consider options to provide incentives to banks to offer credit to strategic sectors at reasonable rates. The governor has worked with the World Bank and the African Development Bank and holds a PhD in International Affairs and Development from Clark Atlanta University.

 

(By Kwasi Kpodo. Editing by Matthew Mpoke Bigg and Richard Balmforth)

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Nigeria central bank raises benchmark interest rate in surprise move

22 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Nigeria’s central bank unexpectedly raised the benchmark interest rate to 12 percent from 11 percent on Tuesday, changing gears to curb galloping inflation after cutting the rate only four months ago.

The bank also raised the cash reserve ratio (CRR) for commercial banks to 22.5 percent from 20 percent and it held the liquidity ratio at 30 percent, Governor Godwin Emefiele said.

Emefiele said after a meeting of its monetary policy committee that the central bank would keep the naira foreign exchange rate stable despite a sharp fall of the currency on the parallel market due to shortages of dollars.

Africa’s biggest economy is going through its worst economic crisis in years due to a slump in crude prices. Oil exports account for around 70 percent of national income.

Emefiele attributed the rate hike to the state of the economy and rising annual inflation, which hit 11.4 percent in February, a three-and-a-half year high and well above the central bank’s target band of 6 to 9 percent.

“The committee noted that excess liquidity in the banking system was contributing to the current pressure in the foreign exchange market with a strong path through to consumer prices,” he told reporters.

But some analysts saw the tightening of monetary policies as a signal that the bank would devalue the naira eventually. The currency has fallen some 40 percent on the parallel market as import firms struggle to get dollars from official channels.

“This definitely reflects a departure from policy in recent months and we interpret this as a leading indicator for a possible naira devaluation later down the line,” said Cobus de Hart, analyst at NKC African Economics.

“This may signal that the central bank is starting to lean towards tightening policy in anticipation of higher inflation following a devaluation,” he said.

 

WEAK INVESTOR CONFIDENCE

Eighteen of 20 analysts polled by Reuters had expected the central bank to hold interest rates steady at 11 percent.

Alan Cameron, an economist at brokerage Exotix, said the central bank had raised the benchmark rate as the previous loosening of monetary policy had not given a fillip to the economy.

“I think there is a realisation the liquidity they have been injecting wasn’t turning into overall lending in the economy because the confidence is not very high, so it made sense to withdraw that.”

Emefiele also called for swift approval of the 2016 budget, which on Tuesday was put on the agenda of the upper house of parliament for debate.

 

(By Camillus Eboh. Reporting by Ulf Laessing, Alexis Akwagyiram, Chijioke Ohuoha and Oludare Mayowa; Writing by Alexis Akwagyiram and Ulf Laessing; Editing by Gareth Jones)

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Ghana consumer inflation slows to 18.5% in February

9 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ACCRA (Reuters) – Ghana’s annual consumer price inflation fell to 18.5 percent in February from 19.0 percent the month before, helped by the stability of the local currency, the statistics office said on Wednesday.

Consumer prices could fall further if the cedi holds steady and in the absence of any external shock, deputy government statistician Anthony Amuzu told reporters in Accra.

After weakening nearly 4 percent in January on seasonal high corporate dollar demand, the cedi, has remained firm in recent weeks. It was trading at 3.8500 to the greenback on Wednesday, down 1.3 percent year-to-date.

“The stability of the cedi was the major driver in February,” Amuzu said, adding that it drove down prices of imported items.

The commodities exporter is implementing a three-year aid programme with the International Monetary Fund (IMF) in an attempt to remedy fiscal problems including inflation persistently above government targets.

The IMF projects that inflation will peak before slowing to around 10 percent at the end of the year and the central bank has been tightening monetary policy in order to contain it.

Analyst say the easing in February CPI showed that the central bank’s tight monetary policy had been effective.

“The deceleration in year-on-year inflation also relieves the pressure on the Bank of Ghana to raise interest rates in the near term,” said Standard Chartered’s head of Africa research Razia Khan.

Year-on-year non-food inflation for February, which comprises imported goods, was 24.5 percent, compared with 25.5 percent the month before. Food inflation was 8.3 percent, from 8.2 percent in January.

 

(Reporting by Kwasi Kpodo; Editing by Matthew Mpoke Bigg and Toby Chopra)

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Kenya’s inflation falls, may pave way for easing of rates

29 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s year-on-year inflation rate slowed to 6.84 percent in February, the statistics office said on Monday, prompting at least one analyst to say the central bank could start easing rates gradually.

February’s rate is the lowest since October last year, when it stood at 6.72 percent, the statistics office said.

Razia Khan, head of research for Africa at Standard Chartered in London, said this supported the case for policymakers to start lowering costs of credit later this year.

“While lower global oil prices have clearly helped, we nonetheless expect the CBK (Central Bank of Kenya) to enact a moderate pace of easing, paying careful attention to continued foreign exchange stability in the process,” she said.

The statistics office added the fall was driven by a -0.43 percent monthly drop in the price of food, which has the biggest weighting in the basket of goods used to measure inflation.

“This resulted from notable decreases in prices of key food items which slightly outweighed the increases,” the Kenya National Bureau of Statistics said in a statement.

Prices of housing and transport also came down on a monthly basis, the bureau said.

The governor of the central bank Patrick Njoroge told Reuters in December he expected inflation to be contained within the government’s preferred band of 2.5-7.5 percent.

 

(Reporting by Duncan Miriri; Editing by Janet Lawrence)

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Morocco annual inflation eases to 0.3% in January

22 February 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

RABAT (Reuters) – Morocco’s annual consumer price inflation eased to 0.3 percent in January from 0.6 percent in December, mainly due to falling food prices, the country’s High Planning Authority said on Monday.

Food inflation eased to 0.2 percent from 1.1 percent from January 2015 to January 2016. Non-food price inflation rose at 0.6 percent, from 0.2 percent in December.

Transport costs fell 0.4 percent, while hotels and restaurants were 2.3 percent more expensive, the agency said.

On a month-on-month basis, the consumer price index eased to 0.1 percent in January, down from 0.5 percent in December. Food price inflation fell 0.3 percent, while non-food inflation dropped 0.1 percent.

 

(Reporting by Aziz El Yaakoubi; editing by Katharine Houreld)

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South Africa’s January headline CPI rises to 6.2% year-on-year

17 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s headline consumer inflation quickened more than expected to 6.2 percent year-on-year in January, compared with 5.2 percent in December, data from Statistics South Africa showed on Wednesday.

On a month-on-month basis, prices rose 0.8 percent compared with an increase of 0.3 percent in the previous month.

Core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy, edged up to 5.6 percent year-on-year in January from 5.2 percent in the previous month, while also rising to 0.7 percent month-on-month.

The consensus for January headline CPI was 5.93 percent, according to a Reuters poll.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia)

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Ugandan inflation eases to 7.6% year-on-year in January

1 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

KAMPALA (Reuters) – Uganda’s inflation eased to 7.6 percent year-on-year in January from a revised 8.4 percent a month earlier, helped by a slowdown in food inflation, the statistics office said on Monday.

The Uganda Bureau of Statistics (UBOS) said annual food inflation had slowed to 12.7 percent in January, from 13.8 percent in December.

Core inflation – which excludes food, fuel, electricity and metered water – decreased to 7.1 percent in January from 7.6 percent in December, UBOS said in a news conference.

On a monthly basis, headline prices rose 0.1 percent in January after rising 0.2 percent in December.

David Bagambe, a trader at Diamond Trust Bank, said that, despite the decrease in inflation, the central bank was unlikely to start easing its policy stance because it needed to maintain high yields on its debt instruments to manage liquidity.

“For now, the central bank is more concerned about the huge amount of liquidity in the system than the small changes in inflation,” he said.

 

 

 

 

(Reporting by Elias Biryabarema; Editing by Kevin Liffey)

 

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