East Africa: Further cut in Kenya; on hold in Uganda – Standard Chartered
Razia Khan, Chief Economist, Africa and Middle East at Standard Chartered Bank, sheds light on the East African central banks’ monetary policy outlook.
“Central Bank of Kenya (CBK) surprised with an unexpected CBR cut in January, to 8.25%.
We now see scope for a further 25bps cut in Kenya in March, to 8.0%.
Below-potential economic growth and a near-term improvement in CPI favour more easing in Kenya.
While growth concerns are still evident in Uganda, we now no longer see further easing in this cycle.
Ugandan inflation remains well-behaved, but this year’s locust invasion is a threat to food prices.
At 9%, Uganda’s policy rate is already at a historical low.”