African officials have warned that the sharp rise in oil prices due to the conflict in Iran will challenge monetary policymaking and could hit productivity in key sectors like mining, putting the continent’s ongoing economic recovery in peril.
Central banks from Accra to Luanda have been cutting lending rates in recent months on the back of falling inflation and stable foreign exchange rates, and to spur their economies.
That might be over, for now.
“Periods of heightened uncertainty have become a defining feature of the global economic landscape, challenging central banks worldwide in unprecedented ways,” Uganda’s central bank told Reuters.
The bank, the only major one in the region that had adopted a cautious stance even before the war broke out, said it will reassess its tools and processes to ensure their effectiveness in the challenging environment.
Angola’s central bank held rates on Thursday after three straight cuts, with Governor
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