Revisiting the Inflation-Hedging Properties of Precious Metals in Africa

Recent work has suggested that precious metals can be used as inflation hedges in several African nations. A closer examination of the data suggests there is little merit to using precious metals for this purpose. While consumer prices, platinum prices, and (potentially) the exchange rate may be threshold cointegrated in Ghana, Morocco, and Tanzania, whether platinum can be used as a respite from an inflation shock depends on the regime in which the shock occurs. The search for a suitable inflation hedge in African nations continues