‘Risk-off’ wave weakens Rand; Rising imports weaken Kenyan Shilling

‘Risk-off’ wave weakens Rand The Rand came under pressure this week amid a wave of ‘risk-off’ sentiment, with global coronavirus cases continuing to rise and tensions between the US and China increasing as Trump banned TikTok and WeChat. South Africa’s manufacturing output fell 16.3% year on year in June, after shrinking by 32.4% in May. […]

Naira activity subdued post-Eid; Importer obligations weigh on Kenyan shilling

Naira activity subdued post-Eid With minimal activity after the two-day Eid holiday, the Naira appreciated slightly to 473 per dollar in the parallel market at the beginning of the week before slipping back to 474. A shortage of dollars persists given recent weeks of lower revenue from oil, Nigeria’s biggest foreign exchange earner. Demand has […]

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 […]

Africa FX recovery as business reopens; “Risk on” Rand strongest since March

Recovery from Kenya to South Africa as businesses reopen A cross-continental easing in restrictions on economic activity – in some cases spurred by protests, such as in Senegal – furthered the recovery in currencies last week from South Africa to Kenya. While a heavy economic toll continues, we see the reopening of businesses and markets, […]

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 […]