Most African central banks due to decide on interest rates in the next two weeks are set to keep them on hold as decades-high inflation eases after more than a year of tightening.

Those such as in Egypt, Kenya and Mozambique may also factor into their decisions a drop in global commodity prices and the unwinding of supply constraints. Expectations that the US Federal Reserve may pause its most aggressive hiking cycle since the 1980s, which could weaken the dollar and boost their currencies, will be another consideration.

Others like South Africa and Nigeria, both of which are facing domestic challenges that may keep inflation elevated, are poised to hike.

Zambia, May 17

Policy rate: 9.25% Inflation rate: 10.2% (April) Inflation target: 6%-8%

The Bank of Zambia’s monetary policy committee will likely raise its key interest rate for a second time this year to contain double-digit inflation and support its currency, which has come under renewed pressure from slow progress in debt-restructuring talks, said Trevor Hambayi, an independent Lusaka-based economist.

The southern African nation has been struggling to seal a deal to revamp $12.8 billion in external loans since becoming Africa’s first pandemic-era defaulter in November 2020. Still, the corn harvest currently underway could help temper prices, reducing some pressure on the central bank to raise rates.

Egypt, May 18

Deposit rate: 18.25% Inflation rate: 30.6% (April) Inflation target: 7% +/- 2 ppt

A temporary slowdown in inflation may give Egypt’s MPC room to pause, especially after Governor Hassan Abdalla signaled higher interest rates are doing little to cool prices.

The central bank “is likely to remain data-led, and will see declining global commodity prices and a reduction in domestic inflation as supportive of their current monetary stance,” said Farouk Soussa, an economist at Goldman Sachs Group Inc. The monetary authority sees inflationary pressures stoked mainly by supply issues, “reducing the rationale for a further hike in the medium term,” he said.

Eight of 11 economists polled by Bloomberg expect the MPC to hold and the rest forecast a 100 basis-point hike.

Angola, May 19

BNA rate: 17% Inflation rate: 10.6% (April)

After two consecutive interest-rate cuts this year, policymakers at Banco Nacional de Angola are likely to break the trend and keep borrowing costs unchanged, said Wilson Chimoco, an economist at Universidade Catolica de Angola. That will allow them to assess what a recent bout of currency weakness may mean for annual inflation, after the monthly rate rose for a third time in a row, he said.

Ghana, May 22

Policy rate: 29.5% Inflation rate: 41.2% (April) Inflation target: 8% +/- 2 ppts

Rate setters in Ghana may hold borrowing costs after hiking by 16 percentage points since November 2021 as inflation is forecast to continue to slow, said Patrick Asuming, a senior lecturer at the University of Ghana Business School. Food prices are likely to ease over the harvest season and the cedi should benefit from expectations that the West African country will secure a $3 billion bailout from the IMF this week, he said.

Mauritius, May 22

Key rate: 4.5% Inflation rate: 8.3% (April) Inflation target: 2%-5%

With inflation easing for four straight months, after 265 basis points of rate increases last year, the Bank of Mauritius is set to pause at its first MPC meeting of 2023, said Tahir Wahab, an independent chartered banker and accountant. It will want to wait and see if the trend will continue, “given that budget 2023-2024 is near and any rate hike would disrupt the prevailing economic conditions,” he said.

Nigeria, May 23

Policy rate: 18% Inflation rate: 22.2% (April) Inflation target: 6%-9%

The Central Bank of Nigeria’s MPC is predicted to extend its longest phase of monetary tightening in more than a decade to temper inflation that is near an 18-year high and likely to remain elevated, Rand Merchant Bank’s Usoro Essien and Oyinkansola Samuel said in a research note.

Pest infestations in vegetable farms in parts of northern Nigeria that are impacting an estimated 70% of output, the expected removal of a costly fuel subsidy and the full implementation of a 40% wage increase for federal government workers are likely to place upward pressure on prices, they said.

South Africa, May 25

Repurchase rate: 7.75% Inflation rate: 7.1% (March) Inflation target: 3%-6%

Policymakers in South Africa are widely expected to raise the key rate against a backdrop of significant rand weakness and sticky inflation in an economy flirting with recession.

The median of 14 economists’ estimates in a Bloomberg survey — conducted before the sharp depreciation in the rand caused by a row with the US over allegations that Pretoria supplied weapons to Russia, and angst over South Africa’s energy crisis — was for a quarter-point hike. Several economists such as Absa Bank Ltd.’s Miyelani Maluleke and BNP Paribas’s Jeffrey Schultz have since revised their forecasts higher to 50 basis points.

The South African Reserve Bank has stated clearly “that the priority for monetary policy currently is to bring inflation and inflation expectations down sooner rather than later,” Maluleke said in a research note. “Against this context, we believe that the SARB MPC will respond to the big FX weakening with more tightening.”

Eswatini and Lesotho, whose currencies are pegged to South Africa’s rand, will probably match the Reserve Bank’s move by month-end.

Kenya, May 29

Central bank rate: 9.5% Inflation rate: 7.9% (April) Inflation target: 5% +/- 2.5 ppts

Kenya’s rate-setting committee is poised to leave borrowing costs unchanged to consider the effects of a jumbo-size hike in March after inflation softened more than expected last month.

The stance will help balance the need to keep the costs of borrowing for individuals and government despite a push by investors for higher coupons from government securities, said Tony Mwiti, a director at Nairobi-based consulting firm Clark and Hampton.

The panel “may also consider the ongoing national tax increment and high cost of living backlash that the government is currently facing and thereby may opt not to rock the boat by increasing interest rates,” Mwiti said.

Mozambique, May 31

MIMO interbank rate: 17.25% Inflation rate: 9.6% (April)

Mozambique’s central bank will probably keep its benchmark rate steady for the next few months, Isaac Matshego and Nicky Weimar, economists at Nedbank Group Ltd. in neighboring South Africa, said in a note. Annual inflation has peaked, and will continue to ease over the rest of 2023, they said.

The easing should start to see the Banco de Mocambique cutting rates in the third quarter, the economists said.