African presidents from countries including the Democratic Republic of Congo and Senegal called for the IMF to triple the amount of money available to Africa under the fund\u2019s Special Drawing Right reserves to $100 billion to support countries hard hit by the coronavirus pandemic. The leaders were attending the African Economies Funding Summit in Paris this week alongside French President Emmanuel Macron, who also called for the COVAX vaccine-sharing scheme to double its vaccination target for Africa by the end of this year. With slow vaccine rates and increased infections impacting the global economic recovery, we expect to see accelerated vaccine rollout across the continent.<\/p>\n\n\n\n
The Naira was little changed at 411.63 to the dollar on the NAFEX window from 411.67 at the previous week\u2019s close, with markets experiencing a 71% slump in foreign exchange supply to $58.88 million on Wednesday compared to $203.42 million at the end of last week. Forex utilisation also fell to $4.98 billion in the first quarter\u2014a 65% drop compared to the opening three months of 2020. Lower forex utilisation typically means it\u2019s harder for local businesses to access foreign currency. Meantime, the Naira remained steady on the parallel market at 482 to the dollar. We expect it to trade around 481 in the coming week while weakening the NAFEX window towards 420 due to the fall in FX supply.<\/p>\n\n\n\n
The Cedi declined to 5.7750 against the dollar from 5.7400 the previous week as the country continues to adjust to a range of new tax measures introduced to revive the economy and support its recovery from the coronavirus pandemic. The European Investment Bank this week agreed to provide \u20ac170m to help Ghana establish a new national development bank, a key component of the Ghana Cares \u2018Obaatampa\u2019 Project to help boost the economy following the onset of COVID-19. We expect the currency to weaken further toward 5.80 as the new taxes continue to weigh on the economy.<\/p>\n\n\n\n
The Rand was steady against the dollar at 14 as a subdued greenback helped offset a larger than expected rise in consumer price inflation. April\u2019s CPI reading of 4.4% — the highest level in 14 months and up from 3.2% in March — hasn\u2019t affected the outlook for keeping key interest rates unchanged at 3.5%, with the South African Reserve Bank meeting this week on Thursday. Inflation is set to temporarily breach the 4.5% mid-point of its 3%-6% inflation target range. We anticipate the Rand will remain supported at around 14 to the dollar amid improving optimism as economies begin to reopen following COVID-related lockdowns.<\/p>\n\n\n\n
The Pound was stable at 15.66 following the country\u2019s five-day Eid al-Fitr holiday. The IMF this week noted Egypt\u2019s resilience through the pandemic as one of the world\u2019s fastest-growing economies while achieving targets set in its economic reform agenda. The country\u2019s central bank said it would extend its support to the tourism sector by increasing provisions to cover wages, basic maintenance and operating expenses. Bias is towards appreciation given the positive momentum.<\/p>\n\n\n\n
This week, the Ivory Coast raised 59.5 billion FCFA (\u20ac89 million) through the auction of treasury bonds maturing between six months and a year\u2014attracting 92.5 billion FCFA of demand. The West African country said it intends to issue 530 billion FCFA of bonds in the second quarter, compared to 480 billion FCFA in the first quarter. In March, the IMF said the Ivory Coast is likely to grow by around 6.5% this year, having exited its four-year IMF programme last December.<\/p>\n\n\n\n
The Shilling depreciated slightly against the dollar this week, trading between 106.6 and 107.9 due to higher demand for the greenback. Meantime, foreign currency reserves increased by around $20 million to $7.594 billion, equivalent to 4.64 months of import cover. Kenya is also expecting to receive $410 million from the IMF\u2014the second payment from a $2.34 billion loan approved in April to help support the country\u2019s economy and contain the pandemic. The IMF now forecasts the economy will expand by 6.3% this year. Given this backdrop, we expect some improvements in the Shilling over the coming week.<\/p>\n\n\n\n
The Shilling slid against the dollar to 3545\/3555 from 3530\/3540 at last week\u2019s close, pushed lower by dollar demand from exporters, including those from the energy sector. Kenyan-based private equity firm Ascent Capital this week said it has raised $100 million for its second fund to invest in SMEs across East Africa, including in Uganda. We expect inflows from investors to support the Shilling this week.<\/p>\n\n\n\n
The Shilling was trading steadily at 2314\/2324, the same levels as last week. A special committee set up to report on the country\u2019s response to COVID-19 this week presented its findings to President Samia Suluhu Hassan, urging the government to ramp up public health measures to tackle the virus, as well as calling for the government to take a science-based approach to its response. We foresee a stable Shilling in the coming week supported by matched dollar supply and demand from the manufacturing and energy sectors.<\/p>\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\n\n\n African presidents from countries including the Democratic Republic of Congo and Senegal called for the IMF to triple the amount of money available to Africa under the fund\u2019s Special Drawing Right reserves to $100 billion to support countries hard hit by the coronavirus pandemic. The leaders were attending the African Economies Funding Summit in Paris […]<\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":1,"featured_media":3591,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[19],"tags":[278,249,22,296,204,205,206,207,316,209,308,309,407,408,26,27,365,32,363,364,354,396,298,299,34,397,217,300,218,357,301,192,231,33,302,252,366,398,257,409,303,304,182,305,306],"class_list":["post-3590","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-covid-19-tanzania","tag-eco","tag-eco-currency","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-tanzania-covid","tag-tanzanian-shilling-rate","tag-tanzanian-shilling-vs-dollar","tag-uganda","tag-ugandan-shilling-rate","tag-ugandan-shilling-vs-dollar"],"acf":[],"gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3590","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=3590"}],"version-history":[{"count":0,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3590\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media\/3591"}],"wp:attachment":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media?parent=3590"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/categories?post=3590"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/tags?post=3590"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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