The increase came despite a moderation in consumer prices. Egypt\u2019s annual urban inflation slowed to 13.9 percent in September from 14.5 percent in August, while core inflation eased to 14.1 percent from 14.9 percent.<\/p>\n
However, renewed currency weakness has complicated the inflation outlook.\n<\/p>\n
The Egyptian pound weakened to a record low of 56 per dollar on October 26, according to LSEG data, raising concerns about the cost of imported goods and the possibility of renewed price pressures. And data from African Markets show that the currency depreciated by 6.90 percent last month, becoming the second weakest performing currency in the continent.\n<\/p>\n
Uganda and Namibia tighten as currency and fuel pressures rise<\/h3>\n
Uganda delivered October\u2019s largest rate increase, raising its benchmark interest rate by 225 basis points to 12 percent at an emergency monetary policy meeting on October 14.\n<\/p>\n
The increase pushed the policy rate to its highest level since 2017 as the central bank moved to contain a sharp depreciation of the Ugandan shilling and limit imported inflation.\n<\/p>\n
Namibia followed with a 25-basis-point increase, raising its benchmark repo rate to seven percent in October, its highest level since January 2025.<\/p>\n
The Bank of Namibia said the decision was aimed at containing the secondary effects of higher fuel prices on consumer inflation while protecting the Namibian dollar\u2019s one-to-one peg to the South African rand.\n<\/p>\n
Read also:\u00a0How Rwanda\u2019s tourism dollars edged Nigeria, South Africa in F1 race<\/a><\/strong>\n<\/p>\n Inflation in the Southern African nation accelerated to 5.4 percent in September, its highest level since January 2024, from 2.1 percent in March, reflecting the impact of rising energy costs.\n<\/p>\n The central bank also revised its inflation forecasts upwards to 4.2 percent for 2026 and four percent for 2027, compared with previous projections of four percent and 3.9 percent, respectively.\n<\/p>\n Namibia\u2019s latest increase narrowed its interest-rate differential with South Africa to 25 basis points from 50 basis points, bringing its benchmark rate closer to South Africa\u2019s 7.25 percent.<\/p>\n The bank maintained its economic growth forecasts at 2.1 percent for 2026 and 2.8 percent for 2027, although weaker global growth, livestock disease outbreaks and potential El Ni\u00f1o conditions remain risks.\n<\/p>\n Despite the renewed tightening, monetary policy across Africa remains divided, with some central banks raising interest rates while others continue easing to stimulate investment and economic activity.\n<\/p>\n In September, Nigeria, Zambia, Zimbabwe and Angola collectively reduced their benchmark interest rates by 950 basis points.\n<\/p>\n Nigeria delivered the largest reduction, cutting its monetary policy rate by 350 basis points to 23 percent as slowing inflation and improving foreign exchange conditions gave policymakers room to lower borrowing costs.\n<\/p>\n Read also:\u00a0South Africa\u2019s debt-to-GDP ratio drops after economy is revised 5% higher<\/a><\/strong><\/p>\n Zambia and Zimbabwe each reduced their rates by 250 basis points, while Angola lowered its benchmark rate by 100 basis points.\n<\/p>\n The cuts reflected efforts to support credit growth and investment after an extended period of restrictive monetary policy.\n<\/p>\n The Democratic Republic of Congo has also pursued substantial monetary easing, reducing its key interest rate from 25 percent to 12.5 percent between October 2025 and July 2026 to improve access to credit and support economic activity.\n<\/p>\n Elsewhere, central banks have adopted a more cautious approach.\n<\/p>\n Kenya paused its easing cycle and maintained its benchmark interest rate at 8.75 percent amid uncertainty surrounding global energy prices and geopolitical developments.<\/p>\n Ghana held its policy rate at 14 percent, while Morocco and Mozambique also maintained their benchmark rates in September at 2.25 percent and 9.25 percent, respectively.\n<\/p>\n The contrasting decisions reflect differences in inflation trends, exchange-rate stability, economic growth and exposure to global commodity-price shocks.\n<\/p>\n Read also:\u00a0African ministers seek AI rules to protect creators, cultural assets<\/a><\/strong>\n<\/p>\n African central banks are also navigating a less supportive international financial environment as major economies respond to inflation and energy-price pressures.\n<\/p>\n Tighter monetary conditions in advanced economies could increase external borrowing costs, encourage capital outflows and place additional pressure on African currencies.<\/p>\n For countries with substantial dollar-denominated debt, currency depreciation could raise debt-servicing costs while making imported fuel, food and industrial inputs more expensive.\n<\/p>\n \u201cWith US monetary policy still relatively restrictive following September\u2019s first rate increase since 2023, African policymakers will be alert to exchange-rate weakness, capital outflows and imported inflation,\u201d Angelika Goliger, EY Africa chief economist, said in a recent report.\n<\/p>\n \u201cEven where domestic inflation is easing, these pressures are likely to limit the pace of rate cuts,\u201d she added.\n<\/p>\n The International Monetary Fund (IMF) has also cautioned central banks against prematurely relaxing monetary conditions.\n<\/p>\n Speaking during the recent IMF and World Bank Group Annual Meetings, Kristalina Georgieva, IMF managing director, urged policymakers to remain focused on price stability.<\/p>\n Read also:\u00a0African peers show Tinubu what is missing in $21.7bn borrowing plan<\/a><\/strong>\n<\/p>\n \u201cOn monetary policy, we are urging central banks to stay laser-focused on their price stability mandates,\u201d she said.\n<\/p>\n \u201cThe case for tightening is strongest where inflation remains above target and economic activity is high. Now may be a good time for a prudent hawkish bias in many countries.\u201d\n<\/p>\n The IMF warned that tighter global financial conditions could make refinancing debt more expensive, particularly for countries with substantial external financing requirements and heavy debt-service burdens.\n<\/p>\n A stronger dollar could compound these pressures by increasing both borrowing costs and the local-currency value of external debt obligations.<\/p>\n For African policymakers, the challenge is increasingly how to prevent another inflationary cycle without undermining already fragile economic growth.\n<\/p>\n October\u2019s rate increases do not necessarily signal a continent-wide return to aggressive monetary tightening. However, they suggest that the relatively predictable easing cycle is giving way to a more fragmented monetary policy environment.\n<\/p>\n The direction of interest rates in the coming months will increasingly depend on global oil prices, currency stability, food supply conditions and the ability of central banks to contain imported inflation without further constraining businesses and consumers.<\/p>\n Source: <\/p>\n Egypt became the latest African economy to tighten monetary policy after the Central Bank of Egypt (CBE) raised its benchmark interest rates by 100 basis points on Thursday, marking its… <\/p>\n","protected":false},"author":1,"featured_media":10898,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-10897","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/posts\/10897","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/comments?post=10897"}],"version-history":[{"count":0,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/posts\/10897\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/media\/10898"}],"wp:attachment":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/media?parent=10897"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/categories?post=10897"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/tags?post=10897"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Africa\u2019s monetary policy paths diverge<\/h3>\n
Global monetary tightening adds to Africa\u2019s challenges<\/h3>\n
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