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Africa FX risk downside amidst 2021 recovery

FX risk skewed to downside amidst 2021 recovery  With the new year’s trading now in full swing, we reiterate our 2021 outlook for moderate depreciation of sub-Saharan currencies—between 5.50% and 9.99% against the dollar—given the lag effects of the economic fallout from COVID-19, softened commodity prices in the global market, and rising risk of debt […]

Rand at post-COVID high set for more gains; Magufuli revitalization leaves Shilling weaker

Rising food prices add pressure for Naira Nigeria’s currency weakened to 475 per dollar as currency traders funneled unmet demand from official sources into the parallel market. Downward pressure was further reinforced as the consumer price index rose from 13.7% to 14.2% amid an uptick in food prices caused by border closures, dollar restrictions, and […]

Rand poised for Ramaphosa recovery plan; Tanzania Shilling stable before election

Dollar hoarders test CBN mettle The Naira lost ground from last week’s gains, sliding to 461 to the dollar in the unofficial market from 457 a week ago. Lower oil export revenue and the economic impact from the pandemic will cause external reserves to sink to between $29.9b and $34.3b, from $35.7b in September, the CBN […]

Mali’s hidden risk in currency clampdown; Lowest Kenyan Shilling has further to fall

Hidden danger in Mali coup from currency clampdown Beyond the fallout from political turmoil in Mali, a clampdown on transactions in the West African CFA Franc risks adding to the COVID-era economic disarray. Within hours of the military seizing power, the Central Bank of West African States (BCEAO) announced protective restrictions on the flows of […]

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, […]

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 […]

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