{"id":3581,"date":"2021-04-23T00:00:00","date_gmt":"2021-04-23T00:00:00","guid":{"rendered":"https:\/\/staging.azafinance.com\/2021\/04\/23\/eco-currency-gets-impetus-from-uemoa-appointment\/"},"modified":"2021-04-23T00:00:00","modified_gmt":"2021-04-23T00:00:00","slug":"eco-currency-gets-impetus-from-uemoa-appointment","status":"publish","type":"post","link":"https:\/\/azafinance.com\/eco-currency-gets-impetus-from-uemoa-appointment\/","title":{"rendered":"Eco currency gets impetus from UEMOA appointment","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"\n

Eco currency gets impetus from UEMOA appointment<\/strong><\/h2>\n\n\n\n

The\u00a0West African Economic and Monetary Union (UEMOA)\u00a0signalled strong backing to economic reforms needed for the Eco currency to work by appointing the economist Kako Nubukpo\u00a0to its commission\u00a0last week.\u00a0For several years, Togo\u2019s former minister of foresight has been engaged in an anti-CFA\u00a0Franc crusade.\u00a0Togolese\u00a0President Faure Gnassingb\u00e9\u00a0pushed for him to be appointed to the commission.\u00a0The Eco currency\u00a0project has suffered from considerable criticism during the past two years\u00a0and fallen behind schedule. This\u00a0now\u00a0looks like a moment\u00a0when the\u00a0debate\u00a0could\u00a0reignite\u00a0with\u00a0the appointment\u00a0as a catalyst.<\/p>\n\n\n\n

Naira\u00a0slides on back of higher food inflation<\/strong><\/h2>\n\n\n\n

The Naira\u00a0weakened\u00a0on\u00a0the parallel market to 480 to the dollar from\u00a0483 amid rising inflation.\u00a0Nigeria\u2019s main price index\u00a0jumped\u00a0to 18.17% in March from 17.33% in February, according to the country’s\u00a0National Bureau of Statistics.\u00a0Food inflation\u00a0spiked to 22.95%\u00a0in March\u00a0from 21.79% the previous month.\u00a0On the I&E\u00a0Window,\u00a0the currency weakened to\u00a0as\u00a0low as 437.41\u00a0this week,\u00a0before\u00a0quickly rebounding\u00a0to a high of 394.00, and then pulling back to\u00a0410.\u00a0This volatility is likely to remain, with inflation concerns mitigated by the rise in crude oil prices\u00a0this year (Nymex\u00a0settled\u00a0at $63.38 a barrel\u00a0on Monday, almost a 31% jump year to date). Rising oil revenue and\u00a0increased remittance inflows following the \u2018Naira for Dollar\u2019 incentive policy\u00a0have helped boost\u00a0foreign exchange\u00a0reserves from $34.845 billion to $35.22 billion\u00a0so far this month, according to the Central Bank of Nigeria.\u00a0Amidst the swings, we expect\u00a0the overall trend will be a\u00a0weakening\u00a0on\u00a0the parallel\u00a0market\u00a0towards 490\u00a0on inflation concerns.<\/p>\n\n\n\n

Ghana’s resilience seen in 2020 growth<\/strong><\/h2>\n\n\n\n

The Cedi slipped to 5.7800\u00a0to the dollar this week\u00a0from 5.7500\u00a0last\u00a0week amid poor liquidity in the FX markets. We expect the weakening to reverse amid stronger economic data. The\u00a0Ghana Statistical Service said the\u00a0nation’s economy\u00a0expanded by\u00a00.4% in 2020,\u00a0one of only a few in Africa and globally to record positive growth rates amid the COVID-19 pandemic. Agriculture\u00a0was the\u00a0main growth\u00a0driver, with the sector\u00a0expanding by\u00a07.4%, while\u00a0services\u00a0grew by\u00a01.5%. We expect the\u00a0Cedi to climb towards\u00a0the\u00a05.74\u00a0level in the coming week\u00a0on the back of positive growth momentum.\u00a0<\/p>\n\n\n\n

Rand\u00a0in resurgent mode on growth boost<\/strong><\/h2>\n\n\n\n

The Rand gained\u00a0this week to\u00a014.24\u00a0to the dollar from\u00a014.30\u00a0last week amid\u00a0positive domestic economic data\u00a0and\u00a0rising risk appetite\u00a0spurring speculative buying.\u00a0South Africa\u2019s government earlier this month\u00a0increased its 2021 outlook for\u00a0growth from 2.8% to 3.1%.\u00a0The currency has gained 8% from its\u00a0Jan. 12 low\u00a0of 15.52. Given emerging positive economic news and global risk appetite, we project sustained gains\u00a0in the currency\u00a0in the near term.\u00a0<\/p>\n\n\n\n

Egypt announces $80 billion sustainable investment budget<\/strong><\/h2>\n\n\n\n

The\u00a0Pound\u00a0remained steady this week,\u00a0trading\u00a0at 15.67 to the dollar.\u00a0The Minister of Planning and Economic Development, Hala el-Said, announced a sustainable development plan for fiscal 2021\/2022 at\u00a0LE1.25 trillion\u00a0($80 billion). The budget\u00a0for\u00a0investments directed\u00a0at\u00a0the\u00a0economy’s\u00a0productive sectors\u00a0increased by\u00a0125%,\u00a0while\u00a0funds targeting\u00a0human development\u00a0jumped by\u00a070%.\u00a0We project continued\u00a0stability with a bias towards appreciation\u00a0in coming days.<\/p>\n\n\n\n

Nairobi locked down until end of May<\/strong><\/h2>\n\n\n\n

The\u00a0Shilling\u00a0came\u00a0under pressure this week, trading\u00a0at 108.30 to the dollar\u00a0from\u00a0a\u00a0close of\u00a0107.50\u00a0last\u00a0week,\u00a0driven by\u00a0high\u00a0corporate demand for dollars\u00a0and\u00a0ongoing\u00a0uncertainty about the course of the pandemic.\u00a0The government\u00a0indicated that the existing COVID-related lockdown in Nairobi and its four surrounding counties will last\u00a0until the end of May,\u00a0hampering economic activity. On a positive note,\u00a0the country’s foreign exchange reserves increased to $7.65 billion\u00a0(4.71 months of import cover)\u00a0on\u00a0April 15 from\u00a0$7.42 billion\u00a0the previous week. The reserves act as\u00a0cushion against\u00a0any\u00a0drastic depreciation. For this reason, we foresee only\u00a0slight pressure on the\u00a0Shilling in the near term.<\/p>\n\n\n\n

Ugandan Shilling\u00a0retreats from 3 \u00bd year high<\/strong><\/h2>\n\n\n\n

After hitting a 3\u00bd year high of 3600 to the dollar last week, the\u00a0Shilling retreated to\u00a03610\/3620 levels\u00a0this week\u00a0amid high corporate demand for dollars.\u00a0Dividend payments\u00a0are likely to\u00a0sustain pressure on the local currency in the coming days, with\u00a0local firms increasing dollar demand.\u00a0In\u00a0its\u00a0fight against COVID-19, the government last week said\u00a0it would\u00a0import\u00a05m\u00a0doses of\u00a0the\u00a0AstraZeneca vaccine next month\u00a0following\u00a0the discovery of new coronavirus variants in the country. The government will use the doses\u00a0to vaccinate at least 80%\u00a0of the 5.5m people who are\u00a0elderly\u00a0or\u00a0below 50 years with underlying medical conditions.\u00a0<\/p>\n\n\n\n

World Bank invests a further $1.15 billion in Tanzania<\/strong><\/h2>\n\n\n\n

The\u00a0Shilling traded steadily against the dollar, staying\u00a0at the same level as\u00a0last week’s close\u00a0of\u00a02310\/2324.\u00a0On Monday,\u00a0during\u00a0a\u00a0meeting with President Samia Suluhu Hassan,\u00a0Mara Warwick, the\u00a0World Bank’s country\u00a0director,\u00a0unveiled that\u00a0the Bank would increase\u00a0its\u00a0financial support to Tanzania, with five\u00a0further\u00a0development projects\u00a0valued at $1.15 billion,\u00a0in\u00a0addition to already approved projects\u00a0valued at $4.9 billion. On Tuesday, the Bank of Tanzania auctioned\u00a0for the first time\u00a0a\u00a025-year bond\u00a0and invited\u00a0both retail and institutional\u00a0investors to participate.\u00a0The bond is being issued as part of the\u00a0government’s\u00a0efforts to lengthen the maturity profile of\u00a0its\u00a0domestic debt.\u00a0This coming week,\u00a0we expect a stable\u00a0Shilling\u00a0with\u00a0support\u00a0from\u00a0investor inflows.<\/p>\n\n\n\n

Receive weekly FX insights straight to your inbox! Sign up here<\/a>.<\/h2>\n\n\n\n

Issued\u00a0by\u00a0AZA. This Newsletter is produced as a service to our clients. It is prepared by our dealing professionals and\u00a0is based on their understanding and interpretation of market events. AZA cannot\u00a0be held responsible for any losses of whatever nature sustained as a result of action taken based on comments contained in this publication.<\/em><\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"

Eco currency gets impetus from UEMOA appointment The\u00a0West African Economic and Monetary Union (UEMOA)\u00a0signalled strong backing to economic reforms needed for the Eco currency to work by appointing the economist Kako Nubukpo\u00a0to its commission\u00a0last week.\u00a0For several years, Togo\u2019s former minister of foresight has been engaged in an anti-CFA\u00a0Franc crusade.\u00a0Togolese\u00a0President Faure Gnassingb\u00e9\u00a0pushed for him to be […]<\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":1,"featured_media":3582,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[19],"tags":[278,249,22,296,204,205,206,207,316,209,308,26,27,365,32,363,364,354,396,298,299,34,397,217,300,218,357,301,192,231,33,302,252,366,398,257,303,304,182,358,359],"class_list":["post-3581","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fx-insights","tag-africa-covid19","tag-africa-debt","tag-africa-foreign-exchange","tag-africa-forex","tag-african-currencies","tag-african-currencies-forex","tag-african-currencies-naira","tag-african-currencies-vs-dollar","tag-cedi-vs-dollar","tag-covid-19-africa","tag-covid-19-kenya","tag-egypt","tag-egyptian-pound","tag-egyptian-pound-vs-dollar","tag-ghana-cedi","tag-ghana-cedi-in-dollar","tag-ghana-cedi-rate","tag-kenya-2021","tag-kenya-maize-ban","tag-kenyan-shilling-rate","tag-kenyan-shilling-vs-dollar","tag-naira","tag-naira-4-dollar","tag-naira-after-lockdown","tag-naira-rate","tag-naira-rate-covid-19","tag-naira-usd-liquidity","tag-naira-vs-dollar","tag-rand","tag-rand-range","tag-rand-rate","tag-rand-vs-dollar","tag-senegal","tag-senegal-economy","tag-senegal-protests","tag-tanzania","tag-tanzanian-shilling-rate","tag-tanzanian-shilling-vs-dollar","tag-uganda","tag-ugandan-election","tag-ugandan-shilling-election-rate"],"acf":[],"gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3581","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/comments?post=3581"}],"version-history":[{"count":0,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3581\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media\/3582"}],"wp:attachment":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media?parent=3581"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/categories?post=3581"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/tags?post=3581"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}