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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="543" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/LLWMXSWBVJMF3BMTIDLHLYEXLI-820x543.jpg" alt="" class="wp-image-506323" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/LLWMXSWBVJMF3BMTIDLHLYEXLI-820x543.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/LLWMXSWBVJMF3BMTIDLHLYEXLI-300x199.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/LLWMXSWBVJMF3BMTIDLHLYEXLI-136x90.jpg 136w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/LLWMXSWBVJMF3BMTIDLHLYEXLI-768x508.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/LLWMXSWBVJMF3BMTIDLHLYEXLI-1536x1017.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/LLWMXSWBVJMF3BMTIDLHLYEXLI-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Rwanda&#8217;s President Paul Kagame of the ruling Rwanda Patriotic Front (RPF) party sits to submit his candidacy for an a July 15 election at Rwanda&#8217;s National Election Commission in Kiyovu, Kigali, Rwanda May 17, 2024. REUTERS/Jean Bizimana/File Photo</figcaption></figure>



KIGALI, July 11 (Reuters)&nbsp;&#8211;&nbsp;Rwandan President Paul Kagame is expected to cruise to a fourth term in office in an election on Monday against two opposition candidates who were cleared to run against him but have only modest expectations.



Kagame, 66, helped lead the rebel movement that ended the 1994 genocide in Rwanda and has served as president since 2000. He faces only two rivals because six other potential candidates were not cleared to run by the state-run electoral commission.



Kagame won nearly 99% of the vote in the last election in 2017, which followed a constitutional change removing term limits that would have barred him from standing again.



His reelection could signal further stability but also continued global scrutiny, given accusations of rights abuses and continued tensions with neighbouring Democratic Republic of Congo.



Kagame has won praise during his tenure for rebuilding the country of 14 million after the genocide, in which more than a million people were killed. Rwanda has emerged as a regional financial hub.



But his government has been accused by Western nations and rights activists of muzzling the media, assassinating opponents, and backing rebel groups in neighbouring Congo.



International scrutiny was intensified by the migration deal Rwanda struck in 2022 to receive thousands of asylum seekers from Britain. Newly elected British Prime Minister Keir Starmer confirmed on Saturday he would scrap the agreement.



Rwanda&#8217;s government has denied all the accusations against it, and while campaigning, Kagame promised continued development and stability.



&#8220;With you, there is nothing our country will not achieve, because today you have leaders who are not foolish and you are not foolish,&#8221; he told young supporters at a rally last week in Eastern Province.



<h2 class="wp-block-heading" id="h-two-challengers">TWO CHALLENGERS</h2>



Eight candidates had applied to run against Kagame, but only two were retained in the final list validated by the electoral commission. The others, including Kagame&#8217;s most vocal critics, were invalidated for various reasons that included prior criminal convictions.



The two approved candidates, Frank Habineza and Philippe Mpayimana, ran against Kagame in 2017.



In an interview with Reuters, Habineza, the leader of the Democratic Green Party, said he expected to exceed his total of 0.48% of the vote from 2017.



&#8220;People are only considering 2017 and say that I got 0.4%, but they forget that our party stood for parliament and got more than 5%,&#8221; he said.



Mpayimana, who works for the Ministry of National Unity and Civic Engagement, urged voters at a campaign event to consider his candidacy.



&#8220;It&#8217;s true you cannot change the winning team, but we also have to give opportunities to the junior teams to see if they can deliver on their pledges. That is what democracy means,&#8221; he said.



Over 9 million voters are registered for the polls in which they will also elect members of the 80-seat lower house of parliament. Provisional results are expected by July 20.



(Reporting by Aaron Ross, Editing by Bate Felix and Timothy Heritage)

FILE PHOTO: Rwanda’s President Paul Kagame submits his candidature for re-election in Kigali

Kagame expected to cruise to fourth term in Rwanda election

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="597" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/JQPE6SE4FVJ2TESCZASBTQHGQI-820x597.jpg" alt="" class="wp-image-506072" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/JQPE6SE4FVJ2TESCZASBTQHGQI-820x597.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/JQPE6SE4FVJ2TESCZASBTQHGQI-300x218.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/JQPE6SE4FVJ2TESCZASBTQHGQI-124x90.jpg 124w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/JQPE6SE4FVJ2TESCZASBTQHGQI-768x559.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/JQPE6SE4FVJ2TESCZASBTQHGQI-1536x1119.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/JQPE6SE4FVJ2TESCZASBTQHGQI-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">File photo: A woman fetches drinking water from an unprotected well, as Zimbabwe is experiencing an El Nino-induced drought, resulting in malnutrition among children under the age of five, pregnant and lactating women, and adolescents, in Kotwa in Mudzi district, Zimbabwe July 2, 2024. REUTERS/Philimon Bulawayo/File photo</figcaption></figure>



HARARE, July 10 (Reuters)&nbsp;&#8211;&nbsp;Zimbabwe has revised its economic growth forecast downwards as southern Africa&#8217;s worst drought in decades ravages crop yields, its finance minister told Reuters on Wednesday, but a bounceback in growth is likely in 2025.



Finance Minister Mthuli Ncube said economic growth is forecast at 2% for 2024, down from 3.5% forecast in November, due to an El Niño-induced drought which has led to widespread crop failure.



El Niño is a natural climate phenomenon in which surface waters of the central and eastern Pacific become unusually warm, causing changes in global weather patterns.



Zimbabwe is among the hardest hit by drought in the region, impacting crop yields. Neighbours Zambia and Malawi have declared states of disaster as a result of the drought.



Last month, the International Monetary Fund also said it expected Zimbabwe&#8217;s growth to fall to 2%, down from 5.3% last year.



&#8220;We are all downgrading our growth targets for 2024 because of deeper than expected impact on our agriculture, but next year is brighter,&#8221; Ncube said.



Growth is expected to recover to above 5% in 2025, he added.



In May, the Zimbabwean government forecasted that staple maize production will drop 72% in the 2023/24 season.



Ncube said the drought had affected agriculture output and the country expects to import 1.4 million metric tonnes of grain.



To ease hunger across the country, Zimbabwe received around $32 million drought insurance last week from an African Union agency. Government has also appealed to international donors to assist with food aid.



Ncube will give the mid-term budget review later this month.



(Reporting by Nyasha Chingono, Editing by Tannur Anders and Angus MacSwan)

A woman fetches drinking water from an unprotected well, in Kotwa in Mudzi district

Lower growth forecast for Zimbabwe as drought ravages crop yields – finmin

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="429" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-820x429.jpg" alt="" class="wp-image-506011" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-820x429.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-160x84.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY-768x402.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HCVRNAVJRJMOJBUK4XOB7PEJGY.jpg 1200w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A teller serves a client with Kenya shilling notes at the cashier&#8217;s booth of a forex exchange bureau in Kenya&#8217;s capital Nairobi, April 20, 2016. REUTERS/Thomas Mukoya/File Photo</figcaption></figure>



NAIROBI, July 10 (Reuters) &#8211; Kenya&#8217;s shilling weakened on Wednesday, pressured by increased foreign-currency demand and a credit rating downgrade by Moody&#8217;s, traders said.



At 0800 GMT, commercial banks quoted the shilling at 128.25/129.25 per dollar, compared with Tuesday&#8217;s closing rate of 127.75/128.75.



Moody&#8217;s pushed Kenya&#8217;s sovereign rating deeper into junk territory on Monday, citing the country&#8217;s diminished capacity to implement a fiscal consolidation strategy after the president withdrew planned tax hikes in response to mass protests.



Traders said the higher foreign-currency demand was mainly coming from the manufacturing sector and general goods importers.



(Reporting by George Obulutsa; Editing by Alexander Winning)

HCVRNAVJRJMOJBUK4XOB7PEJGY

Kenyan shilling weakens due to increased FX demand, Moody’s downgrade

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1366" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-scaled.jpg" alt="" class="wp-image-506008" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-1536x1025.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Ugandan shilling and US dollars in the draw at a foreign exchange currency bureau in Kampala, Uganda, on Wednesday, Aug. 16, 2023. Uganda&#8217;s central bank said it stands ready to act if the World Bank&#8217;s decision to halt new funding over the country&#8217;s passage of anti-LGBTQ legislation impacts the currency further. Photographer: Luke Dray/Bloomberg via Getty Images</figcaption></figure>



KAMPALA, July 10 (Reuters) &#8211; The Ugandan shilling was stable on Wednesday, underpinned by dollar inflows from offshore investors and some commodity exporters weighing against thin importer appetite, traders said.



At 0710 GMT, commercial banks quoted the shilling at 3,700/3,710, the same level as Tuesday&#8217;s close.



(Reporting by Elias Biryabarema; Editing by George Obulutsa)

Ugandan Economy Following Rate Cut

Ugandan shilling stable as offshore investor FX inflows help

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-820x461.jpg" alt="" class="wp-image-400641" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/1x-1-2-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A collection of mixed denomination South African rand coins sit in an arranged photo in Johannesburg, South Africa, on Thursday, June 22, 2017. South Africas inflation rate rose for the first time this year in May after food-price growth quickened from the slowest pace since December 2015. Photographer: Waldo Swiegers/Bloomberg via Getty Images</figcaption></figure>



JOHANNESBURG, July 10 (Reuters)&nbsp;&#8211;&nbsp;The South African rand gained in early trade on Wednesday against a weaker dollar, as focus remains on the future interest rate path of the world&#8217;s biggest economy.



At 0725 GMT, the rand traded at 18.0550 against the dollar, around 0.5% stronger than its previous close. The dollar last traded around 0.06% weaker against a basket of global currencies.



&#8220;Fed Chair Jerome Powell commented last night&#8230; that the Fed is not comfortable cutting rates right now,&#8221; said Andre Cilliers, currency strategist at TreasuryONE.



But U.S. inflation has been improving in recent months and Powell said that &#8220;more good data would strengthen&#8221; the case for central bank interest rate cuts.



Markets will focus on key U.S. inflation data on Thursday that could give more hints on the Fed&#8217;s future interest rate path.



The rand often takes cues from global drivers like U.S. monetary policy in the absence of major local data points.



On the Johannesburg Stock Exchange, the blue-chip Top-40 index traded around 0.1% weaker in early trade.



South Africa&#8217;s benchmark 2030 government bond was slightly stronger in early deals, as the yield weakened 1.5 basis points to 9.79%.



(Reporting by Tannur Anders; Editing by Alexandra Hudson)

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<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="408" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1.jpg" alt="" class="wp-image-400697" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1-300x200.jpg 300w" sizes="auto, (max-width: 612px) 100vw, 612px" /><figcaption class="wp-element-caption">Double exposure of coin stack with city background and world map, financial graph, world map and global network business concept idea, element by NASA.</figcaption></figure>



JOHANNESBURG, July 10 (Reuters)&nbsp;&#8211;&nbsp;The following equity and currency market moves may affect South African markets on Wednesday.



<h2 class="wp-block-heading" id="h-south-african-markets">SOUTH AFRICAN MARKETS</h2>



The South African rand edged lower on Tuesday after Federal Reserve Chair Jerome Powell did not give a clear indication on whether the U.S. central bank would cut interest rates soon.



On the stock market, the Top-40 index closed down 0.2%.



<h2 class="wp-block-heading" id="h-global-markets">GLOBAL MARKETS</h2>



Asian stocks hovered near two-year highs on Wednesday on growing bets of imminent U.S. rate cuts, while the New Zealand dollar slid after its central bank signalled greater confidence that inflation was coming to heel.



<h2 class="wp-block-heading" id="h-wall-street">WALL STREET</h2>



The S&amp;P 500 and Nasdaq notched record-high closes on Tuesday, fueled by gains in Nvidia after U.S. Federal Reserve Chair Jerome Powell told lawmakers that more &#8220;good&#8221; economic data would strengthen the case for rate cuts.



<h2 class="wp-block-heading" id="h-gold">GOLD</h2>



Gold traded in a narrow price range on Wednesday as investors looked forward to a key U.S. inflation reading that could shed more light on the Federal Reserve&#8217;s interest rates trajectory.



&#8211; &#8211; &#8211; &#8211;



Some of the main stories out in the South African press:



<h2 class="wp-block-heading" id="h-business-day">BUSINESS DAY</h2>



&#8211; Reserve Bank loses nearly R1bn on its stake in African Bank



<h2 class="wp-block-heading" id="h-fin-24">FIN 24</h2>



&#8211; Business lobby alarmed as US House votes for &#8216;full review&#8217; of SA relationship



(Compiled by Tannur Anders)

istockphoto-1076949610-612×612-1

South African Markets – Factors to watch on July 10

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="357" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1.jpg" alt="" class="wp-image-400669" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1-300x175.jpg 300w" sizes="auto, (max-width: 612px) 100vw, 612px" /><figcaption class="wp-element-caption">World map with charts and graphs as symbols of global finance</figcaption></figure>



NAIROBI, July 10 (Reuters) &#8211; The following company announcements, scheduled economic indicators, debt and currency market moves and political events may affect African markets on Wednesday.



<h2 class="wp-block-heading" id="h-events">EVENTS:</h2>



*Rwanda&#8217;s statistics office releases consumer inflation data for June.



*State-owned Ethio Telecom releases its financial results for the full year to end-June.



<h2 class="wp-block-heading" id="h-global-markets">GLOBAL MARKETS</h2>



Asian stocks hovered near two-year highs on Wednesday on growing bets of imminent U.S. rate cuts, while the New Zealand dollar slid after its central bank signalled greater confidence that inflation was coming to heel.



<h2 class="wp-block-heading" id="h-world-oil-prices">WORLD OIL PRICES</h2>



Oil prices rebounded on Wednesday following three days of declines after an industry report showed U.S. crude and fuel stockpiles fell last week, indicating steady demand, and the outlook for interest rate cuts improved.



<h2 class="wp-block-heading" id="h-south-africa-markets">SOUTH AFRICA MARKETS</h2>



The South African rand edged lower on Tuesday after Federal Reserve Chair Jerome Powell did not give a clear indication on whether the U.S. central bank would cut interest rates soon.



<h2 class="wp-block-heading" id="h-nigeria-petroleum">NIGERIA PETROLEUM</h2>



Nigeria&#8217;s NNPC is in talks for another oil-backed loan to boost its finances and allow investment in its business, its chief executive told Reuters, as pressure mounts on the state-backed oil company the economy depends upon.



<h2 class="wp-block-heading" id="h-kenya-markets">KENYA MARKETS</h2>



Kenya&#8217;s shilling was steady on Tuesday, with dollar supply and importer demand matching, traders said.



<h2 class="wp-block-heading" id="h-ethiopia-central-bank">ETHIOPIA CENTRAL BANK</h2>



Ethiopia&#8217;s central bank said on Tuesday it was adopting an interest rate-based monetary policy regime, setting its initial rate at 15%, and creating an interbank market for currency trading, in a major shake-up of the country&#8217;s banking sector.



((Compiled by Nairobi Newsroom))

World map with charts and graphs as symbols of global finance

African Markets – Factors to watch on July 10

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-820x461.jpeg" alt="" class="wp-image-505971" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV.jpeg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Consumers are shopping at a supermarket in Qingzhou, China, on June 12, 2024.  Nurphoto | Nurphoto | Getty Images</figcaption></figure>



BEIJING — China’s consumer price inflation rose by 0.2% in June from a year ago, missing expectations, while producer prices fell in-line with forecasts, data from the National Bureau of Statistics on Wednesday showed.



China’s consumer price index was expected to rise by 0.4% year-on-year in June, according to a poll by Reuters.



The producer price index, which measures factory-gate prices, dropped by 0.8% from a year ago — in line with expectations.



Core CPI, which strips out more volatile food and energy prices, rose by 0.6% year-on-year in June, slightly slower than the 0.7% increase for the first six months of the year.



Pork prices surged by 18.1% in June from a year ago, while beef prices fell by 13.4%. Tourism prices rose by 3.7% year-on-year in June, down by 0.8% from May.



“The risk of deflation has not faded in China. Domestic demand remains weak,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note.



He added that China would rely on exports to support growth in the first half of the year.



The country is scheduled to release trade data for June on Friday.



Lackluster domestic demand in China has kept inflation low, in contrast to major economies such as the U.S. where prices have remained elevated.







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108003607-1720573755368-gettyimages-2157355769-cfoto-dailylif240617_npCKV

China’s inflation numbers miss expectations, rising 0.2% in June

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="929" height="523" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell.jpeg" alt="" class="wp-image-505743" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell.jpeg 929w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell-768x432.jpeg 768w" sizes="auto, (max-width: 929px) 100vw, 929px" /><figcaption class="wp-element-caption">Federal Reserve Chair Jerome Powell speaks during a House Financial Services Committee hearing on the “Federal Reserve’s Semi-Annual Monetary Policy Report” on Capitol Hill in Washington, U.S., March 6, 2024.&nbsp; Bonnie Cash | Reuters</figcaption></figure>



Federal Reserve Chair&nbsp;Jerome Powell&nbsp;on Tuesday expressed concern that holding interest rates too high for too long could jeopardize economic growth.



Setting the stage for a two-day appearance on Capitol Hill this week, the central bank leader said the economy remains strong as does the labor market, despite some recent cooling. Powell cited some easing in inflation, which he said policymakers stay resolute in bringing down to their 2% goal.



“At the same time, in light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face,” he said in prepared remarks. “Reducing policy restraint too late or too little could unduly weaken economic activity and employment.”



The commentary coincides with the approaching one-year anniversary of the last time the Federal Open Market Committee raised benchmark interest rates.



The Fed’s overnight borrowing rate currently sits in a rage of 5.25%-5.5%, the highest level in some 23 years and the product of 11 consecutive hikes after inflation hit its highest level since the early 1980s.



Markets expect the Fed to begin cutting rates in September and likely following up with another quarter percentage point reduction by the end of the year. FOMC members at their June meeting, however,&nbsp;indicated just one cut.



<h2 class="wp-block-heading" id="h-strengthen-our-confidence"><a></a>‘Strengthen our confidence’</h2>



In recent days, Powell and his colleagues have indicated that&nbsp;recent inflation data has been somewhat encouraging&nbsp;after a surprise jump to start the year. Inflation as judged by the Fed’s preferred&nbsp;personal consumption expenditures price index&nbsp;was at 2.6% in May after peaking above 7% in June 2022.



“After a lack of progress toward our 2 percent inflation objective in the early part of this year, the most recent monthly readings have shown modest further progress,” Powell said. “More good data would strengthen our confidence that inflation is moving sustainably toward 2 percent.”



The statement is part of congressionally mandated semiannual updates on monetary policy. After delivering the remarks, Powell will face questioning from Senate Banking Committee members on Tuesday, then the House Financial Services Committee on Wednesday.



In past appearances, Powell has veered away from making dramatic policy announcements while having to dodge politically loaded questions from committee members. The questioning could get contentious this year as Washington is on edge amid a volatile presidential campaign.



However, Powell has stressed that the Fed is not political and does not get involved in taking policy sides outside of its own roles. In his prepared remarks, he emphasized the importance of “the operational independence that is needed” for the Fed to do its job.



His other remarks focused squarely on the stance of policy in relation to the broader economy. Recent data has shown the&nbsp;unemployment rate creeping higher&nbsp;and broad growth as measured by gross domestic product receding. Both the manufacturing and services sectors reported being in contraction during June.



But Powell said the data is showing that “the U.S. economy continues to expand at a solid pace” despite the deceleration in GDP.



“Private domestic demand remains robust, however, with slower but still-solid increases in consumer spending,” he said.

107383408-17097467082024-03-06t173039z_1867852560_rc2hg6akf319_rtrmadp_0_usa-fed-powell

Fed Chair Powell says holding rates high for too long could jeopardize economic growth

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-820x547.jpg" alt="" class="wp-image-505670" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/HIIJDZFCB5P35MGUWBAGP3Y76E-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A person casts a ballot in the second round of the early French parliamentary elections, at a polling station in Paris, France, July 7, 2024. REUTERS/Sarah Meyssonnier</figcaption></figure>



July 9 (Reuters)&nbsp;&#8211;&nbsp;Elections are taking place this year in countries home to almost half of the world&#8217;s population, from Taiwan&#8217;s general election in January to the U.S. presidential race in November.



The votes come amid growing economic and geopolitical strife, with the Ukraine war, conflicts in the Middle East and rising trade tensions between the United States and China, the world&#8217;s two largest economies.



In some countries, there are concerns about the resilience of democracy itself as political discourse has polarized or been warped by disinformation. Many of this year&#8217;s elections will not be free and fair &#8211; or their results will be disputed.



Half-way through the biggest year for elections in history, here are some common themes that have emerged in Reuters&#8217; reporting from around the world:



<h2 class="wp-block-heading" id="h-cost-of-living">COST OF LIVING</h2>



From the price of green onions in Indonesia to higher fuel bills across Europe, rises in the price of food, energy and other basics have hit the living standards of households across the world. Incumbent governments and leaders are paying for it.



Polling showed that cost of living concerns were a powerful factor in a fall in support for Prime Minister Narendra Modi&#8217;s party in India, losses suffered by mainstream parties in June&#8217;s European Parliament elections and the poll rout of Britain&#8217;s ruling Conservatives.



In Africa, discontent over living standards and unemployment contributed to the ANC&#8217;s loss of its majority in South Africa&#8217;s election. Worsening poverty is likely to help shape the outcome of Ghana&#8217;s December vote to succeed President Nana Akufo-Addo.



Polling ahead of the U.S. election suggests voters are similarly unimpressed with President Joe Biden&#8217;s efforts to improve their livelihoods, with many Americans feeling their living standards are falling despite strong headline economic data. One outlier: In Mexico, the ruling MORENA party emerged the winner after offering ample subsidies to low-income voters.



While economic policymakers say there are signs that inflation is returning to normal, they warn it has not yet been fully tamed and many economies remain fragile.



&#8220;A number of pressure points could throw the global economy off track,&#8221; Agustin Carstens, head of the central bank umbrella group the Bank of International Settlements (BIS), warned in June.



<h2 class="wp-block-heading" id="h-green-transition">GREEN TRANSITION</h2>



With the cost of living uppermost in many voters&#8217; minds, climate change action has often been crowded out of election campaigns &#8211; even as global temperatures break new records and death tolls from extreme heat climb.



While surveys show Europeans still support ambitious action on global warming, the debate there has focused on the perceived cost to livelihoods, with farming and other lobbies stepping up calls for an easing of net-zero policies.



In the EU elections, ecologist Greens shed most of the gains made five years earlier. In Britain, Labour dropped a 28-billion-pound green investment pledge ahead of the July 4 general election, saying the country could not afford it, while their Conservative rivals described themselves as &#8220;on the side of drivers&#8221;, attacking low-traffic and low-emission schemes.



The biggest challenge to the green transition may come from the United States, with Donald Trump campaigning on policies supporting continued fossil fuel use. It remains to be seen how much of Biden&#8217;s Inflation Reduction Act (IRA) green subsidies stay in place in the event of a Trump victory.



<h2 class="wp-block-heading" id="h-swing-to-the-far-right">SWING TO THE (FAR)RIGHT?</h2>



The cost of living crisis has led to rising support for far-right movement&nbsp;in Western countries&nbsp;with a mix of anti-immigration and nationalist policies, often unfunded economic spending plans and populist rhetoric attacking global elites.



Back in March, Portugal&#8217;s Chega party quadrupled its seats in parliament to become the country&#8217;s third-largest party. Three months later, its far-right, eurosceptic peers across Europe made gains in elections to the European Parliament.



In France, Marine Le Pen&#8217;s National Rally failed in elections on Sunday to achieve the majority they were coveting but became the largest single party in a hung parliament that now risks plunging Europe&#8217;s second-largest economy into policy paralyis.



In Britain, the anti-immigrant, nationalist Reform Party won over four million votes, contributing to the collapse in support for the ruling Conservatives even if Britain&#8217;s first-past-the-post electoral system meant it only won a handful of seats.



Austria&#8217;s Sept. 29 election will be closely watched, with polls showing the far-right Freedom Party (FPO) leading rivals after it ranked first in European Parliament elections.



In the United States, Trump has made immigration one of his top domestic campaign issues, declaring he would carry out mass deportations, end birthright citizenship, and expand a travel ban on people from certain countries.



Mohit Kumar, chief economist for investment house Jefferies, noted that immigration as an election theme was hottest in precisely the large Western economies whose ageing populations were creating labour shortages.



&#8220;Economically we need immigration but the political dynamics are shifting away from immigration,&#8221; he said.



<h2 class="wp-block-heading" id="h-debt-and-election-largesse">DEBT AND ELECTION LARGESSE</h2>



With economic hardship so prevalent, many politicians are offering to spend big and cut taxes in a bid to win power &#8211; at the risk of adding to global debt already at record levels after huge post-pandemic stimulus packages in rich-world economies.



Credit rating firm S&amp;P Global has warned the United States, France and other Group of Seven (G7) governments were unlikely to halt rises in their debt &#8220;at the present stage in their electoral cycles&#8221;.



The BIS annual report in June said an election year like this brought an &#8220;especially high&#8221; risk of fiscal expansion that could complicate efforts to bring inflation down to target.



Budget watchdogs in Britain and France &#8211; two countries struggling to balance their budgets &#8211; noted that many spending pledges were either unfunded or unrealistically costed.



Trump has pledged to keep in place a broad 2017 tax cut that he signed while in office, and his economic team has discussed a further round of cuts beyond those enacted in his first term.



Biden, meanwhile, proposes raising levies on businesses and rich individuals, while vowing not to increase taxes for households earning less than $400,000 a year and to assist low- and middle-income Americans with childcare costs. U.S. federal government currently has more than $34 trillion in debt.



Such levels of debt are seen making the global economy more vulnerable to financial shocks and the International Monetary Fund has urged governments to reduce their borrowing.



&#8220;Unfortunately, fiscal plans so far are insufficient and could be derailed further given the record number of elections this year,&#8221; its chief economist Pierre-Olivier Gourinchas said in a recent blog.



<h2 class="wp-block-heading" id="h-defence-and-security">DEFENCE AND SECURITY</h2>



As geopolitical tensions rise, defence and security matters have been prominent in a number of election campaigns so far this year &#8211; particularly in countries near the hotspots.



In February, Finland elected as president Alexander Stubb, who campaigned on the previously non-aligned country fully participating in NATO and allowing the transit of nuclear arms through it. Incumbents in Lithuania won an election dominated by concerns over Russia and calls for higher defence spending.



Taiwan&#8217;s presidential and parliamentary elections on Jan. 13 focused around arguments on how best to deal with China, which views the island as its own territory. The ruling DPP party secured the presidency for a third term as its candidate vowed to safeguard Taiwan from intimidation while emphasising the need for dialogue with Beijing.



In the United States, Democratic voters&#8217; anger over Israel&#8217;s military action in Gaza &#8211; and over Biden&#8217;s continued support of Israel – has emerged as a major vulnerability for him. American views on the conflict have broken down along party lines with Republicans largely supporting Israel.



While Biden voices unwavering support for NATO, Trump has said that if he is returned to the White House, America would fundamentally rethink NATO&#8217;s purpose. He has also asserted without evidence that if elected he would end the conflict in Ukraine before even taking office. On that, Biden has retorted that Trump has &#8220;no idea what he&#8217;s talking about&#8221;.



<h2 class="wp-block-heading" id="h-democracy-at-stake">DEMOCRACY AT STAKE?</h2>



Pro-democracy watchdogs estimate that nearly three-quarters of the world&#8217;s population live in autocracies. Observers and human rights groups have signalled concerns about the fairness of elections this year in Bangladesh, Azerbaijan, Belarus, Cambodia, Iran and Russia. Votes in Algeria and Uzbekistan face similar questions.



Modi&#8217;s electoral setback has been hailed by some commentators as proof of the resilience of its democracy. There was relief at the peaceful handover of power in Senegal in March after moves by the incumbent to delay the vote triggered protests.



Democracy&#8217;s biggest test this year may, however, be in Washington.



Trump refuses to commit to accepting the election results or to rule out possible violence around the Nov. 5 contest. He is already laying the groundwork to contest a potential defeat.



&#8220;We should be quite worried,&#8221; Steven Levitsky, political scientist and professor of government at Harvard University, told a Brookings think tank event in June.



&#8220;A democracy cannot survive if one party in a two-party system is not committed to playing by the democratic rules of the game.&#8221;



(Graphics by Sumanta Sen and Anand Katakam; Editing by Simon Robinson and Daniel Flynn)

France votes in the second round of the 2024 snap legislative elections

How this year of elections is set to reshape global politics

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1161864863-820x547.jpg" alt="" class="wp-image-505639" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1161864863-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1161864863-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1161864863-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1161864863-768x513.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1161864863-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1161864863-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A South African one rand coin sits on South African rand banknotes in this arranged photograph in Pretoria, South Africa, on Wednesday, Aug. 14, 2019. The rand ended a tumultuous week on a positive note, gaining against the dollar for a second day and heading for its first weekly advance in four as technical indicators suggested recent declines are overdone. Photographer: Waldo Swiegers/Bloomberg via Getty Images</figcaption></figure>



JOHANNESBURG, July 9 (Reuters)&nbsp;&#8211;&nbsp;The South African rand was little changed in early trade on Tuesday, as markets awaited the Federal Reserve chair&#8217;s testimony in Washington and U.S. June inflation data for clues on the country&#8217;s future interest rate path.



At 0644 GMT, the rand traded at 18.1300 against the dollar, near its previous close of 18.1175.



&#8220;The rand has opened marginally softer at 18.13 this morning, and we expect trading to remain range-bound in the short term,&#8221; said Andre Cilliers, currency strategist at TreasuryONE.



Markets will listen to the tone of Fed Chair Jerome Powell&#8217;s testimony in Washington on Tuesday and Wednesday and look to June inflation data out of the U.S. later this week for hints on the future interest rate path in the world&#8217;s biggest economy.



&#8220;Analysts will be gauging the Fed&#8217;s response to the recent softer U.S. economic and labour data, with markets already starting to price in two rate cuts this year,&#8221; Cilliers added.



The risk-sensitive rand often takes cues from global drivers like U.S. economic policy in the absence of major local factors.



South Africa&#8217;s benchmark 2030 government bond was slightly stronger in early deals, with the yield down 1 basis point at 9.74%.



(Reporting by Tannur Anders; Editing by Christina Fincher)

South African Rand Rebound Snaps Streak of Weekly Losses

South African rand stable as markets await US interest rate hints

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="425" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/ANCK25OQIFMHTJYACOM5XU5T24.jpg" alt="" class="wp-image-498541" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/ANCK25OQIFMHTJYACOM5XU5T24.jpg 720w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/ANCK25OQIFMHTJYACOM5XU5T24-300x177.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/ANCK25OQIFMHTJYACOM5XU5T24-152x90.jpg 152w" sizes="auto, (max-width: 720px) 100vw, 720px" /><figcaption class="wp-element-caption">Kenya shilling coins and notes are pictured inside a cashier&#8217;s booth at a forex exchange bureau in Kenya&#8217;s capital Nairobi, April 20, 2016. REUTERS/Thomas Mukoya/File Photo</figcaption></figure>



NAIROBI, July 9 (Reuters) &#8211; Kenya&#8217;s shilling was steady on Tuesday, with dollar supply and importer demand matching, traders said.



At 0721 GMT, commercial banks quoted the shilling at 127.75/128.75 per dollar, unchanged from Monday&#8217;s closing.



Traders said there was no immediate reaction in the foreign exchange market to Moody&#8217;s downgrading Kenya&#8217;s sovereign rating deeper into junk territory on Monday.



(Reporting by George Obulutsa; Editing by Bate Felix)

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