Interest rates and stimulus measures
We expect that GCC countries, pegged to the US dollar, will generally follow the US Federal Reserve. Egypt, whose central bank surprisingly cut interest rates in February, has further room to cut its rates as inflation continues to fall, with Sri Lanka and Morocco expected to follow suit. Conversely, Pakistan is likely to continue raising its rates as it seeks IMF funding, while Kenya will have limited room to manoeuver due to caps on lending rates. Global risk appetite is expected feed into rate policy, particularly for major borrowers such as Nigeria.