Tracking East Africa market movements

The East African region has been abuzz with economic activity, especially with recent inflation numbers in Uganda and positive manufacturing data in Kenya. CNBC Africa recently interviewed Kaneja Amani, Global Markets Trader at Standard Bank Group, to provide insights into the market movements in the region. Amani discussed Uganda's inflation trends, highlighting a steady drop since December, with the latest print at 3.5 down from 3.9. He pointed out that consumers in Uganda are benefiting from lower disinflation, which has resulted in a slower pace of price increases. Unlike some neighboring countries facing foreign exchange pressures, Uganda has managed to contain inflation, leading to a rate cut by the Bank of Uganda. Amani commended Uganda for being proactive in addressing inflationary concerns and adjusting monetary policy accordingly. Moving forward, he suggested that Uganda may continue to unwind some of the rate hikes, depending on external borrowing and funding pressures. Shifting focus to Tanzania and Kenya, Amani noted the depreciation of their local currencies due to imbalances in foreign currency demand and supply. This, coupled with crude oil prices reaching $90 a barrel, has created inflationary pressures in both countries, necessitating a tight monetary policy stance to curb inflation. Amani also discussed the recent Stanbic PMI index, which revealed an uptick in Kenya's manufacturing activity, signaling a positive outlook for the economy. Despite challenges such as debt burdens and forex shortages, Kenya's economy continues to show resilience in various sectors. In Kenya, Amani highlighted recent regulatory changes by the Central Bank that govern interbank trading. These changes include reducing the tenor for foreign exchange swaps, lowering the minimum amount required to trade on the interbank, and reintroducing electronic brokerage services for efficient price discovery. Amani emphasized the importance of these changes in fostering a more robust and transparent foreign exchange market in Kenya. Overall, the East African markets are navigating various economic challenges, but with proactive measures and policy adjustments, countries like Uganda and Kenya are striving to maintain stability and promote growth in the region.