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Chop My (Food) Money

On the face of things today's inflation print from June added to the recent run of positive economic news from Nigeria. CPI price growth declined for the fifth month in a row to 16.10% y/y, which was the slowest pace since May last year. However, any high-fives in the Ministry of Finance should be tempered by the fact that the fall was entirely driven by non-food items such as housing and utilities. Food price inflation jumped to an 8-year high of 19.91%.

With headline inflation softening to 9.21% in June from 11.7% in May, the price of some staples falling such as maize flour, sugar, and milk falling, and inflation expectations easing, it was no surprise that the Central Bank of Kenya kept the policy rate at 10.0%. The CBK also noted a desire to support growth which fell to 4.7% in Q1, the slowest pace for over two years. The accompanying statement from the MPC highlighted the resilience of the economy in the face of a slowdown in private sector -credit growth, which itself can be partially traced to the interest rate cap. However, reading between the lines it seems as if the MPC regard the risk of a further slowing as pertinent.

Consumer price inflation in Zimbabwe remained in positive territory during June with a 0.31% y/y print. This followed a 0.75% climb in May which was the fastest pace since September 2013.

Wholesale prices in Tunisia rose by 4.7% y/y in May following a 4.2% jump in April. This was the fastest rate of increase since August 2015.

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