Weekly Global News Wrap: African central banks may cull interest rates; Zimbabwe to halve main lending rate

And another ex-JP Morgan executive was charged over alleged market manipulation.

From Bloomberg:

Central banks in sub-Saharan African economies are expected to diverge on policy when they make interest-rate calls in the next week as some seek to tame inflation and others to boost growth.

Since these panels last met, a deteriorating fiscal outlook in South Africa placed it one step closer to a full house of junk credit ratings. Meanwhile, Ghana raised its budget-deficit forecast whilst Kenya scrapped a controversial law that capped interest rates.

“Where external liquidity is weak, or foreign-currency stability threatened, we expect central banks to either tighten or at least remain on hold,” said Razia Khan, the chief economist for Africa and the Middle East at Standard Chartered.

From Reuters:

Zimbabwe’s central bank halved its main lending rate to 35% as it sought to boost an economy facing its worst crisis in a decade.

The decision marked a sharp change in policy after September’s rate rise. The bank’s Monetary Policy Committee said it now felt there was a positive outlook on inflation, despite a recent monthly increase.

“Notwithstanding a recent spike in monthly inflation to 38.8%, due to shocks caused mainly by adjustments of electricity and fuel prices, the inflation outlook is positive,” the bank's latest report stated.

Inflation soared to a four-month high of 38.75% in October from 17.7% the previous month, propelled by a surge in the prices of food and alcoholic beverages. The government suspended publication of annual inflation data until February, but economic analysts say the figure reached 440% last month.

From Reuters:

Former JP Morgan executive Jeffrey Ruffo was charged by US federal prosecutors with federal crimes including conspiracy to commit wire fraud, the latest amongst former executives from the bank who was charged for alleged market manipulation.

The indictment is the result of an “ongoing investigation,” federal prosecutors said in a statement.

Ruffo is the sixth person to be charged with alleged fraud in connection to JPMorgan’s precious metals desk.

The case relates to spoofing, which involves placing bids to buy or offers to sell contracts with the intent to cancel them before execution, allowing spoofers to influence prices. 

Photo courtesy of Wikimedia Commons.