Zimbabwe Leads Africa in High Monetary Policy Rates as Central Banks Tighten to Combat Inflation
Zimbabwe leads African nations with a high Monetary Policy Rate (MPR) of 35%, followed by Nigeria at 27%. Central banks across the continent grapple with inflation, prompting aggressive monetary tightening.
South Africa's central bank, the SARB, has kept its key lending rate at 7% after its September meeting. Governor Lesetja Kganyago is cautious, wanting to evaluate the impact of previous rate cuts before proceeding. Inflation remains a significant concern, with high MPRs making borrowing expensive for businesses and households, thereby slowing investment and consumption.
Across Africa, MPRs are at elevated levels. Zimbabwe's 35% MPR is the highest, followed by Nigeria's 27%. Central banks are adopting aggressive monetary tightening measures to stabilize currencies and control rising prices. The projected policy rate for South Africa in Q4 2025 is 6.88%. Kganyago aims for the bottom of the 3% to 6% inflation target range, indicating a focus on controlling inflation.
High MPRs across Africa are a response to inflation challenges. South Africa's SARB is monitoring the impact of previous rate cuts before making further policy decisions. The projected policy rate for South Africa in 2025 suggests a continued focus on controlling inflation.
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