Investors are keenly eyeing Wednesday’s release of South Africa’s July inflation figures for insights into the future monetary policy of Africa’s most industrialized economy. Economists surveyed by Reuters predict that the South African Reserve Bank will reduce interest rates for the first time in over two years on September 19.

Data released earlier on Tuesday indicated a 0.4% month-on-month drop in South Africa’s leading indicator for June, which monitors vehicle sales, business confidence, and money supply.

Globally, attention will also be on the U.S. Federal Reserve’s minutes and Chair Jerome Powell’s speech at the Jackson Hole symposium this week, as markets look for clues on potential rate cuts.

As a risk-sensitive currency, the rand is influenced by both global economic trends, such as U.S. monetary policy, and domestic economic indicators. On the stock market, South Africa’s Top-40 index showed little movement, while the benchmark 2030 government bond experienced a slight increase in yield to 9.285%.

The prices on the menu have been erased at a small hotel in a suburb of Ethiopia’s capital, Addis Ababa.

That was no mistake, the waiters said, as businesses in Addis Ababa struggle to keep up with spiralling inflation since the government implemented a flexible exchange rate policy late last month.

Since then, the Ethiopian birr has lost 60% of its value against the dollar as of Monday, sparking anxiety as customers are forced to pay more for basic commodities and some businesspeople are hoarding.

The menus at the Samra Hotel in Bole, a leafy suburb of Addis Ababa, captured the instability: There’s a new price for every meal at any moment.

“Previously, prices would be updated bimonthly but nowadays it’s daily, if not by the hour, to reflect the changing landscape of the market,” said Rahel Teshome, who works at the hotel.

Many supermarkets in Addis Ababa are hoarding products in warehouses and only selling small quantities in their stores to escape punishment by city authorities, who have vowed to crack down on hoarders. Consumers who want to buy in bulk must pay inflated prices for products they are told to pick from warehouses.

In Merkato, the capital’s biggest open-air market, guards are stationed in an attempt to keep businesses from raising prices. Last week, police officers raided some warehouses and confiscated 800,000 liters (210,000 gallons) of edible oil they later distributed to local cooperatives, which offered it at previous prices.

More than 3,000 stores accused of hoarding have been shuttered across the country.

The Addis Ababa City Trade Bureau has warned that more actions will be taken against people who take advantage of the floating of the birr to hike prices.

The new exchange rate policy was a historic decision in a country where the government for decades fixed the price of foreign currencies, allowing a black market to flourish. Commercial banks now can set foreign exchange prices, and non-bank entities are permitted to operate foreign exchange bureaus for the first time.

The International Monetary Fund approved a four-year credit facility worth $3.4 billion coinciding with Ethiopia’s reforms. the IMF pledged to disburse $1 billion immediately to address pressing needs, with Managing Director Kristalina Georgieva describing the reforms as a “landmark moment for Ethiopia.”

Ethiopia, which suffered foreign currency shortages in the months leading to the reforms, imports many essential commodities. To help consumers cope with the impact of the new policy, authorities imported 14 million liters (3.7 million gallons) of edible oil, but such interventions have been minor given the rising prices of other essential goods.

Experts say Ethiopians face unpredictable days ahead in a country where official salaries have generally stagnated for years.

Those with fixed incomes will be most affected by the floating of the birr, said Getachew T. Alemu, an Addis Ababa-based public policy specialist, adding that the immediate injection of IMF funds will not be enough to absorb the pressure.

“Things could get worse, especially for fixed incomers, unless cautious policy actions are taken,” he said.

The government, as it cracks down on price speculators, has appeared unable to follow its own advice. Last week, authorities raised the price of ordinary passports from 2,000 to 5,000 birr, shocking people such as Almaz Teferi, who was starting the process of getting one.

She and some of her friends hope to find work as domestic labourers in one of the Gulf states.

“I have been working as a cleaner to raise the fee for the passport. I came and double-checked the fee on Monday and by Thursday the price had been raised quite significantly,” Teferi said.

Tinubu’s recent policy changes include ending a costly fuel subsidy, which led to an immediate rise in fuel prices and, consequently, higher costs for other essential goods. While some economists view these reforms as necessary for addressing Nigeria’s long-standing economic issues, they have led to a significant decline in the naira’s value and skyrocketing inflation, currently at 34%. With unemployment high and subsidies ended, many Nigerians are feeling the economic strain.

The unrest in Kenya and Nigeria could have broader economic consequences, especially if governments are forced to abandon their reform agendas. According to David Omojomolo, an economist at Capital Economics, ongoing regional issues like corruption and fiscal instability make the region susceptible to further unrest. He notes that while short-term disruptions might have limited effects on growth, they could negatively impact public finances and increase concerns about sovereign defaults.

Nigerian authorities have responded forcefully to the protests, some of which have featured the Russian flag—a symbol some interpret as criticism of Western financial institutions like the IMF and World Bank, which often condition their support on economic reforms. Nigerian Defense Chief General Christopher Musa has vowed to pursue those responsible for unrest and vandalism, while Amnesty International reports that at least 13 protesters have been killed by security forces.

In response to the unrest, President Tinubu has promised to address the protesters’ concerns but has not provided specific details. In a recent address, he assured Nigerians that his government is committed to listening and making necessary adjustments, though it remains uncertain whether his reform agenda will continue to be politically sustainable amidst growing discontent.

The four-year low was helped by a strong shilling and marginal price reductions in key household costs such as electricity and fuel.

This has led to a reduction in transport costs which saw a rise of just 4 per cent in July compared to 7.7 per cent the previous month.

The price of many foods decreased by half a per cent between June and July, but the reprieve did not extend to all categories, with some experiencing sharp increases.

Kenya targets an inflation rate of between 2.5 per cent and 7.5 per cent in the medium-term.

But while overall inflation remains under control, increases in other household costs like cooking oil and cooking gas means consumers still need to tighten their budgets.

In June, Kenyans took to the streets in a wave of deadly protests over tax hikes and the cost of living.

President William Ruto was forced to scrap a proposed finance bill containing the increases in response to the demonstrations.

Ruto, who was sworn in in September 2022, inherited a battered economy grappling with soaring inflation, a high debt burden, unemployment, and post-Covid 19 stagnation.

He has been caught between the demands of lenders such as the International Monetary Fund to cut deficits, and a hard-pressed population reeling from rising costs.

The easing of inflation this month could influence the Central Bank’s decision on interest rates, with a potential rate cut expected when the Monetary Policy Committee convenes on 6 August.

The Energy and Petroleum Regulatory Authority’s announcement propelled the retail cost of one liter of petrol to over 200 Kenyan shillings ($1.36), reaching an all-time high.

The Kenyan population is already grappling with a severe cost-of-living crisis characterized by escalating prices of essential commodities, the imposition of new taxes, and a weakening national currency.

Throughout this year, a series of opposition protests against President William Ruto’s government and its economic policies have taken place, some escalating into violent clashes.

Under the newly instituted pricing structure effective until October 14th, a liter of petrol in the capital city, Nairobi, has surged by nearly 17 shillings, reaching 211.64 shillings ($1.44), while diesel now costs 200.99 shillings.

In response to these price hikes, fares for matatus, the widely used minibuses for transportation in Kenya, are also set to increase by 20 percent nationwide, as reported by the Matatu Owners Association.

Government officials have partially attributed these soaring prices to the recent reduction in oil production by major producers Saudi Arabia and Russia, which has driven global crude prices to their highest levels in ten months.

Energy Minister Davis Chirchir, while speaking to the parliamentary energy committee, acknowledged the gravity of the situation, stating, “There’s not much we can do… certainly, the burden is substantial, and it won’t be easy.”

Earlier this year, Kenya witnessed a series of anti-government protests.