CBN Under Pressure to Devalue Naira; Tanzania Gains Low-Middle Income Status

Assessing the economic damage How bad is the economic fallout from COVID for sub-Saharan Africa? The IMF gave its best estimate last week, updating a dismal forecast in April for a 1.6% contraction in the continent’s economy this year to a yet more dire projection of negative 3.2%. Even with the recent recovery in oil […]

ECO currency planning; Naira rates unification; Kenya negative outlook

ECO currency planning resumes after COVID lull Planning for the new West African ECO currency resumed from a lull since the COVID-19 outbreak, with member states working on terms of engagement. In its second ordinary meeting this year on Monday, the Central Bank serving the eight CFA franc member countries – the Monetary Policy Committee […]

Xi’s forgiveness spurs debt relief optimism; Rand in resistance; Flower power for shilling

Xi’s forgiveness spurs debt relief optimism Amidst weaker economic growth projections, Africa’s currencies look largely unscathed as funds from the World Bank and IMF continue to boost reserves while President Xi’s vow to cancel concessional Chinese loans due this year and rework some commercial debt has bolstered the prospect of a G20 debt relief package. […]

Rally halted in Africa FX; Kenya and Nigeria supported by reserves

Rally halted in African FX as global markets slide African currencies ended weeks of gains in tandem with declines across global markets on concern of a coronavirus second wave impeding recovery in the world’s major economies. Notable in recent weeks has been a relative advance for Kenya, which the IMF reported as overtaking Angola as […]

Recovery for Rand, Shilling amid Ease of Lockdown

Nigerian spenders emerging from lockdown means pressure for Naira Last month we warned of false stability in the Naira as Nigerians on lockdown meant demand was artificially low for dollars, both for consumer spending and production imports. As we anticipated, the easing of lockdown measures last week resulted in a resumption of dollar demand, weakening […]

Naira Picks Up from 3-Year Low; Rare Short-Term Cheer for Rand

IMF rapid financing brings Naira relief Increased CBN dollar supply and the IMF’s $3.4 billion emergency support under the Rapid Financing Instrument (RFI) halted the Naira’s slide. The currency had weakened to a 3-year low of 460 per dollar in the parallel market, while 12-month Naira forward rates pointed to 509, before reprieve to 450 […]

Naira at a 3-Year Low; Rand Shows No Let-Up for Worst EM Currency

Naira at a 3-year low has further to fall The crash in oil prices sent the Naira to its weakest level since 2017 in the parallel market to 450. We foresee further pressure on the Naira after last week’s 7% slide, as a result of declining export revenue combined with deepening economic fallout from coronavirus. […]

Nigerian spenders in lockdown bring false stability to Naira

Nigerian spenders in lockdown bring false stability to Naira Gloom over OPEC’s seeming inability to withstand further slumps in global oil prices left the Naira surprisingly unscathed, and even slightly appreciating in the parallel market to 410.5 per dollar from 412.5 last week. One reason is that, with Nigerians on lockdown, there is less demand […]

Temporary Relief for Rand; Low tax revenues to put pressure on Kenyan Shilling

Relief for Rand unlikely to sustain After the week’s 4.7% rally from lows against the dollar on optimism of a peak in coronavirus cases in the US and Europe, we expect renewed pressure on the Rand as the government considers extending South Africa’s lockdown. Data from the World Bank’s report showed that the nation’s economy […]

Increased Pressure on African Currencies Amidst COVID-19 Chaos

Nigeria in lockdown faces bank pressure The Naira tumbled to its weakest level in 5 years in the parallel market at 415 per dollar, widening the gap with an official rate of 386 (See: current naira to dollar exchange rate). With 14-day lockdowns announced last week for Lagos and Abuja hitting productivity, banks came under […]

No relief for Rand, Naira; Kenya, Uganda intervene to maintain stability

Moody’s adds to pain amid world’s toughest lockdown As South Africa began the world’s toughest coronavirus lockdown (no jogging, no dog walking, no alcohol or cigarette buying), Moody’s delivered its long-anticipated hammer blow, cutting South Africa’s credit ratings to junk status late on Friday. While the downgrade merely brings the agency in line with junk […]