Nigeria’s naira stabilized around 1,598/USD at the official market after recent USD 190 mln central bank interventions. Market confidence has improved with narrowing spreads between official and parallel rates.
May 30, 2025
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Nigeria’s naira stabilized around 1,598/USD at the official market after recent USD 190 mln central bank interventions. Market confidence has improved with narrowing spreads between official and parallel rates.
South Africa’s central bank cut rates by 25 bps to 7.25%, citing lower inflation risks tied to reduced VAT plans, stronger currency, and lower oil prices. Growth forecasts were cut to 1.2% in 2025 due to trade uncertainty from US tariffs.
Zambia’s inflation fell to 15.3% in May, an 11-month low, driven by lower food and fuel prices. The Finance Minister expects a return to single-digit inflation in 2025, helped by improved rains and easing cost pressures.
Brazil’s 10Y bond yield fell toward 14% after peaking at 4.3% (note: likely a typo, 14% intended throughout), driven by below-consensus IPCA-15 inflation and global bond gains. The central bank supported the real via USD auctions, easing inflation concerns. Meanwhile, global supply outlook improved after Japan signaled lower bond issuance.
China’s central bank (PBoC) directed major lenders to increase the share of yuan in cross-border trade settlements to 40% from 25%, aiming to reduce reliance on USD transactions amid tariff tensions. Exporters will benefit from improved settlement systems and reduced service fees.
Indonesia’s central bank will inject IDR 78.45 tln (~USD 4.84 bln) in liquidity starting June by lowering the secondary reserve requirement from 5% to 4%. Foreign funding caps for local banks will rise to 35% of capital from 30%, effective June 1.
Kyrgyzstan held its policy rate at 9.00%, citing strong growth and stable inflation. YTD inflation stands at 2.9%, annual at 7.7%. GDP surged 11.7% YoY in Jan–Apr 2025, led by services and construction. Credit growth is strong and deposit growth hit 16.1%. Next rate decision is due July 28.
Ghana’s central bank is expected to begin cutting its 28% policy rate in Q3, according to Goldman Sachs, as inflation eases faster than expected. Forecasts now see 15% average inflation in 2025 (vs. 17% prior), and 8% in 2026 (vs. 11%).
Paraguay’s central bank held its rate at 6% for the 14th consecutive month. Inflation eased to 4% in April. The bank reaffirmed its inflation-targeting mandate and vigilance
Ghana held its policy rate at 28%, with inflation easing to 21.2% in April and expected to return to the 6-10% target band by Q1 2026. Governor Asiama cited the 30% cedi appreciation since April as boosting disinflation prospects.
Nigeria’s bond strategy saw Barclays recommend switching from 2049 to 2033 dollar bonds to capitalize on better curve rolldown and relatively high mid-curve spreads. Nigeria’s average yield premium over USTs has narrowed by 350 bps since May 2023.
Zambia held its policy rate at 14.5%, citing falling inflation (16.5% in April vs. 16.8% in March). The central bank said the stance remains appropriate given current dynamics.
Angola’s central bank held its policy rate at 19.5% for a sixth straight meeting, citing falling inflation and Kwanza stability. The central bank may revise its 17.5% year-end inflation target in July and denied speculating on IMF aid.
G7 finance ministers and central bank governors pledged coordinated action against global economic imbalances and non-market policies—implicitly criticizing China’s subsidies. They also discussed tightening Russia sanctions and called for deeper analysis of market concentration and supply chain risks.
Central Bank of Egypt cut rates by 100 bps to 24% (deposit) and 25% (lending), marking the second cut this year. The move was smaller than expected, aligning with IMF guidance urging caution amid global uncertainty and inflation risks.
Ghana aims to double weekly gold output to 3 tonnes via expanded small-scale mining and state-led buying through the new Gold Board. The move could boost FX reserves but raises concerns about neglecting cocoa farming, which has struggled recently.
Zambia expects a record 3.66 mln tons of corn in 2025, more than doubling from 2024’s drought-hit output. The rebound should help cool food inflation (up 10.2% in April) and keep CPI within the central bank’s 6–8% target, opening space for rate cuts.
Bank Indonesia cut its policy rate by 25 bps to 5.5% at its May meeting, citing stable inflation and a strengthening rupiah. April inflation accelerated to 1.95% from 1.03% in March, still within the 2.5% ±1% target. The rupiah gained 1.13% MoM against the USD.
Angola’s central bank held its benchmark rate at 19.5% for the sixth consecutive time, citing inflation moderation. Year-end CPI target of 17.5% may be revised in July. The kwanza remains stable due to regular FX sales. The BNA declined to comment on potential IMF support.
Ghana’s central bank flagged inflation risks tied to food supply and external shocks, despite improved FX reserves and cedi appreciation. Governor Asiama said the bank is transitioning toward more active open market operations and longer-tenor instruments.
South Africa’s finance minister presented a budget focused on consolidation, cutting spending and forecasting slower growth while keeping debt on a sustainable path. The budget won backing from the opposition and markets, easing political tensions.
Argentina disappointed farmers by increasing the soy export tax by ~7 percentage points after previously pledging cuts. Though rural support for President Milei remains, the reversal sparked backlash from farming associations.
Bank of Jamaica cut its policy rate by 25 bps to 5.75% amid stable inflation and improved FX conditions. April headline inflation held at 5.3%, with core at 4.4%. GDP rose 0.2% QoQ in Q1 2025, and inflation is expected to trend lower through 2026.
Nigeria’s central bank held its key rate at 27.5% pending clearer inflation data and stabilization post-US tariffs. Inflation remains elevated amid naira depreciation and recent CPI methodology changes. The governor anticipates a 300 bps rate cut to 24.5% by year-end.
In Serbia, FDI during the first quarter of 2025 fell 55% compared to a year earlier, as political unrest and slowing growth compressed investor sentiment. The central bank reported these flows were worth EUR 556 mln during the period.
Sub-Saharan central banks are expected to begin easing policy in the coming weeks as inflation eases, per IMF projections. Egypt, South Africa, Kenya, Mozambique, Eswatini, and Lesotho are likely to cut rates; Nigeria, Ghana, Angola, and Zambia are expected to hold steady. The IMF has downgraded 2025 growth forecasts due to weak external demand and tighter conditions.
Bloomberg analysts noted that LATAM equities are outperforming globally YTD amid political stability, continued remittance inflows, rate cuts, and strong trade fundamentals. Analysts highlighted Brazil’s central bank will likely reduce rates from 14.75% to 11.25% by 2026. Risks include US tariffs and weaker Chinese demand. May’s LATAM’s Fund Manager Survey showed 53% expect Brazil to outperform.
Paraguay’s central bank analysts expect the central bank to hold rates at 6% through 2025. The end-2026 rate forecast rose to 5.63%, with inflation seen at 4% for 2025 and 3.8% by Dec 2026. Inflation is projected to converge with the 3.5% target within the 18–24-month horizon.
China’s 10Y government bond yield slipped to 1.67%, near three-month lows, after the PBoC cut key lending rates for the first time in seven months. Both the one-year and five-year loan prime rates were lowered by 10 bps to record lows of 3.0% and 3.5%, respectively, following broader easing measures earlier this month. The move comes amid weak economic momentum and renewed US-China tensions, after Washington warned against using Chinese semiconductors, prompting Beijing to accuse the US of undermining trade talks and engaging in discriminatory practices.
Philippines posted a USD 2.6 bln balance of payments (BoP) deficit in April, up from USD 639 mln a year earlier, as the government drew on FX reserves to meet debt payments. The cumulative Jan–Apr 2025 BOP deficit rose to USD 5.5 bln from USD 401 mln in 2024, driven by a widening goods trade gap.