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Caps on commercial interest rates in Kenya are unsustainable and the government plans to modify them without driving up lending rates, Finance Minister Henry Rotich said on Friday.

Kenya introduced a cap on commercial lending rates in Sept. 2016, setting them at 4 percentage points above the central bank’s benchmark rate which stands at 10 percent, to limit the cost of borrowing from commercial banks.

It justified the caps at the time, which also set a minimum deposit rate, by accusing lenders of failing to pass on the benefits of growth in the industry to consumers through cheaper loans.

“This is not sustainable,” Rotich told a news conference, saying officials were working with parliament to change the law.

“It can entail an abolishment or a modification, or complete amendment to allow flexibility.”

Finance ministry officials have said the changes may involve a consumer protection law that will give banks more flexibility. The chair of the parliament’s influential budget committee told Reuters the minimum deposit rate could be removed.

Earlier this month, the International Monetary Fund said Kenya had committed to substantially modify the interest rate caps. [nL5N1QQ013][nL8N1QW05W]

Reporting by Omar Mohammed; Writing by George Obulutsa; Editing by Duncan Miriri and Andrew Heavens (Reuters)

Angola’s economic growth is expected to quicken to 2.25 percent this year from one percent in 2017, the International Monetary Fund (IMF) said on Friday.

“The Angolan economy is experiencing a mild recovery. The new administration is rightly focusing on restoring macroeconomic stability and improving governance,” the IMF told reporters in Luanda.

The IMF said it expected inflation to reach 24.75 pct by the end of the year. Inflation stood at 22.72 percent year-on-year in January.

Reporting by Stephen Eisenhammer; Writing by Joe Brock; Editing by James Macharia (Reuters)

South Africa’s rand was weaker on early on Thursday, giving up the previous session’s modest gains as investors opted to pocket small profits as trade war noises continued and short-term technical targets came into view.

* At 0630 GMT, the rand was 0.13 percent weaker at 11.7700 per dollar, having traded as firm as 11.7375 on Wednesday as U.S. President Donald Trump’s firing of Rex Tillerson as secretary of state dented optimistic bets on the world’s largest economy.

* The relief for emerging market and commodity-linked currencies did not last with traders opting to take profits in uncertain conditions.

* The appointment of conservative economic analyst Larry Kudlow as Trump’s top economic adviser, which suggests trade tensions with China could escalate, added to investor nervousness.

* With the rand failing to break below 11.70 since the last day of February, and the carry trade attraction dimming compared to fellow EM’s as the central bank looks set to cut lending rates at month-end, forward momentum has stalled.

* In fixed income, the yield for the benchmark government bond due in 2026 was flat at 8.095 percent.

Reporting by Mfuneko Toyana; Editing by Richard Borsuk JOHANNESBURG (Reuters)

The International Monetary Fund (IMF) on Wednesday approved a three-year, $157.6 million credit facility for Burkina Faso, in part to help boost security after a spate of attacks by Islamist insurgents.
Jihadists linked to al Qaeda killed eight people during an attack on the French embassy and the army headquarters in the capital Ouagadougou this month, the third major attack there in just over two years. [nL2N1QP0CA]

“Burkina Faso faces significant development challenges, which have intensified in the recent period due to security shocks and social unrest,” said IMF Deputy Managing Director Mitsuhiro Furusawa in a statement.

The agricultural economy is expected to grow 6 percent this year, down from 6.5 percent in 2017, but above the 5.9 percent in 2016, the IMF said, driven by cotton production and mining.

Reporting by Edward McAllister; Editing by Mark Potter (Reuters)

The International Monetary Fund has approved a request by Kenya to extend by six months a stand-by agreement that was due to expire at the end of March, giving it time to finish mandatory reviews, the IMF said in a statement.
The stand-by agreement, which was approved in March 2016, was for $989.8 million, alongside a stand-by credit facility of about $494.9 million.

“On March 12, 2018, the Executive Board of the International Monetary Fund approved Kenyan authorities’ request for a six-month extension of the country’s Stand-By Arrangement to allow additional time to complete the outstanding reviews,” the IMF said in a statement late on Tuesday.

Last week the IMF said that stand-by credit facility arrangements cannot be extended beyond 24 months.

It said the reviews were expected to be completed by September, allowing access to the funds available in the stand-by agreement.

“In support of this request, the authorities have committed to policies that will enable them to achieve the program objectives, including reducing the fiscal deficit and substantially modifying interest controls,” IMF said.

The government adopted a cap on commercial lending rates in September 2016, setting it at 4 percentage points above the central bank’s benchmark rate, to limit the cost of borrowing from commercial banks. It said lenders had failed to pass on the benefits of growth in the industry to consumers.

Earlier this month, the Finance Minister Henry Rotich said it was a good time to revisit the cap, while the chair of the parliament’s influential budget committee has also said there was a case for altering it.

The IMF said last month that Kenya had lost access to the funds meant to cushion it against unforeseen external shocks last June, due to failure to complete a review of the programme.

Kenya asked the IMF for the extension last week.

Reporting by George Obulutsa; Editing by Eric Meijer (Reuters)

Kenya will sell five-year and 20-year Treasury bonds worth a total 40 billion shillings ($396 million) this month, the central bank said on Monday.
The bank said in a statement it would receive bids for the two bonds until March 20, and auction them a day later.

The five-year bond will have a market-determined coupon, while the 20-year has a coupon of 13.200 percent.

($1 = 101.0000 Kenyan shillings)

Reporting by George Obulutsa; Editing by Biju Dwarakanath  (Reuters)

South African small lender VBS Mutual Bank has been placed under curatorship because of liquidity issues, Reserve Bank Governor Lesetja Kganyago told a televised news conference on Sunday.
Curatorship means the central bank can appoint an administrator or curator to run the bank, which was thrust into the spotlight in 2016 when it provided a 7.8 million rand ($660,000) loan to former president Jacob Zuma to reimburse the state for upgrades to his personal home.

According to its 2016 annual report, its total assets were around 1 billion rand ($85 million), and any failure would not pose a systemic risk to the wider economy.

“VBS experienced increasing liquidity challenges over the last 18 months,” Kganyago said.

He said the problems stemmed from it taking sizeable deposits from municipalities that were short term and then making long-term loans from this risky base.

Mutual banks in South Africa do not offer the full range of services that commercial banks do and the governor said municipalities were not allowed to make deposits with such entities in the first place.

He said the bank remained open for business.

($1 = 11.8078 rand)

Reporting by Ed Stoddard; Editing by David Evans (Reuters)

Botswana has paid Norilsk Nickel $45 million to settle a dispute after its state-run mining company pulled out of buying a stake in a South African mine from the Russian firm, the minerals minister said on Friday.
Botswana’s state-run BCL Mine pulled out of a 3 billion pula ($281 million) deal in October 2016 to buy a 50 percent stake in Nkomati Nickel Mine from Norilsk due to a lack of funds, prompting the Russian firm to file a legal claim.

Minster of Minerals Sadique Kebonang confirmed the settlement to Reuters and said the payment was approved through a presidential directive on Jan. 24.

Norilsk Nickel declined to comment.

Writing by Joe Brock; Editing by Ed Cropley (Reuters)

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