\nThe Naira held firm against the dollar this week, unchanged at 515 on the parallel market and broadly in line with last week\u2019s close on the official NAFEX window, trading at 411.50 compared to 411.49 last Friday. The currency was supported by Nigeria\u2019s inflation rates falling for a fourth consecutive month, helping to ease the ongoing pressure on the Naira from lower crude sales as the pandemic weakens global oil demand. The country\u2019s consumer price index dropped to 17.38% in July from 17.75% in June, while the composite food index declined to 21.03% in July from 21.83% the previous month. Given the improving inflation outlook, we expect the Naira to remain stable in the coming days.<\/p>\n
Cedi pressures continue as World Bank warns on debt\u00a0<\/strong> Global risk-off trend takes a toll on Rand<\/strong> Remittance inflows support Egyptian Pound<\/strong> Kenya\u2019s FX reserves take hit amid Shilling pressure<\/strong> Dairy exports help keep Ugandan Shilling steady<\/strong> World Bank to finance Tanzanian education infrastructure<\/strong> Issued by AZA Finance. This Newsletter is produced as a service to our clients. It is prepared by our dealing professionals and is based on their understanding and interpretation of market events. AZA Finance cannot be 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":" Zambia\u2019s opposition leader Hakainde Hichilema won the country\u2019s presidential election against incumbent Edgar Lungu, clinching victory by around one million votes. It was the Zambian businessman\u2019s sixth attempt at winning the presidency and comes at a time of increased discontent with the previous regime as the cost of living rises.\u00a0The Zambian Kwacha had depreciated 21% […]<\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":1,"featured_media":3620,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[19],"tags":[22,296,204,205,207,209,299,218,231,33,302,304,306],"class_list":["post-3619","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fx-insights","tag-africa-foreign-exchange","tag-africa-forex","tag-african-currencies","tag-african-currencies-forex","tag-african-currencies-vs-dollar","tag-covid-19-africa","tag-kenyan-shilling-vs-dollar","tag-naira-rate-covid-19","tag-rand-range","tag-rand-rate","tag-rand-vs-dollar","tag-tanzanian-shilling-vs-dollar","tag-ugandan-shilling-vs-dollar"],"acf":[],"gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3619","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=3619"}],"version-history":[{"count":0,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3619\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media\/3620"}],"wp:attachment":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media?parent=3619"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/categories?post=3619"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/tags?post=3619"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nThe Cedi continued to trade above 6 to the dollar, weakening to 6.01 from 6.005 at last week\u2019s close as liquidity conditions remain tight. Some analysts are projecting that Ghana\u2019s economy will expand by 8.9% in the second quarter of 2021 compared to the same period in 2020, boosted by increased international trade and demand for its agricultural and other export commodities, which are estimated to have grown by 18%. Meantime, the World Bank has warned Ghana about its rising domestic and external debt stock, which currently stands at 76.6% of the country\u2019s GDP. We expect to see sustained pressure on the Cedi in the coming days given the ongoing liquidity constraints.
\n![](\"https:\/\/ci4.googleusercontent.com\/proxy\/fUUksHTUA8JPuKFSINWSNANa5ezMGv9U_sdEs3uzgVg3M4dHA8il02ZSuDRInQXin8aqez5u9gMLDwKVh-o726Zp2tMqU8d5i_ZrRnpNQ23lHtNawwBPZrNwSpnIKNlbjPQ8rZaqOp7w5L0Sr7KZJiSWyyYuIWCc61MIVQYNPzWJiGT-S2X2U4yzwQBT6WxyxQ=s0-d-e1-ft#https:\/\/meltwater-apps-production.s3.eu-west-1.amazonaws.com\/uploads\/images\/57f76675d89614522a3fb2b0\/blobid0_1629356225228.png\")
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\nThe Rand depreciated to 14.93 against the dollar from 14.72 at last week\u2019s close amid a broader pullback from riskier assets as investors fret about the rapidly spreading COVID-19 Delta variant, disappointing Chinese economic data and the collapse of Afghanistan\u2019s government. At home, South African inflation edged lower in July to 4.6% from 4.9% in June, hovering within the South African Reserve Bank\u2019s inflation target range of 3% to 6%. We project the Rand will remain under pressure in the coming days given weaker global risk appetite, which is giving support to haven assets.<\/p>\n
\nThe Pound was trading broadly flat at 15.71 to the dollar this week, compared to 15.70 at last week\u2019s close as remittances helped offset the impacts of COVID-19, which have crimped foreign currency inflows from sectors such as tourism. The Central Bank of Egypt said that remittances increased 13% to $28.5 billion between July last year and May 2021. Foreign investments into the country also increased by 47% in the third quarter of the 2020\/21 fiscal year, according to the CEO of the General Authority for Investment and Free Zones. We expect continued remittance inflows and foreign investment to keep the Pound stable in the week ahead.<\/p>\n
\nThe Shilling depreciated further this week, sliding to 109.55 to the dollar from 109.30 at last week\u2019s close as increased dollar demand from merchant traders and the manufacturing sector outpaced inflows from agricultural exports. The recent pressure on the Shilling has led to a fall in Kenya\u2019s foreign exchange reserves, declining to just under $9.3 billion from $9.35 billion a week earlier. We expect the Shilling to be under pressure over the coming seven days as importer dollar demand by the manufacturing sector picks up in the next half of the month.<\/p>\n
\nThe Shilling was unchanged against the dollar this week, trading at 3525\/3535 amid reduced dollar demand from importers that would usually put pressure on the currency. The Shilling was also supported by an increase in exports from the agricultural sector, particularly dairy products. Uganda\u2019s Dairy Development Authority said dairy exports nearly doubled in the 2020\/21 fiscal year compared to 2019\/20, contributing to 42% of the country\u2019s total agricultural exports. We expect dollar demand to remain subdued, which should keep the Shilling stable over the coming week.<\/p>\n
\nThe Shilling was little changed in trading this week, fetching 2314\/2324 to the dollar as the World Bank agreed to pump $425 million into the country to finance the development of public universities and higher education institutions. Tanzania\u2019s economy grew by 4.9% in the quarter ending June, lifted by agriculture, construction, transportation, manufacturing and mining. We expect the Shilling to remain steady over the next seven days as dollar demand from importers is matched by inflows from the energy and manufacturing sectors, as well as from investors. A new online system is to speed up access to the country\u2019s Certificate of Incentives, which entitle holders to various investment incentives, potentially boosting inflows into the country.<\/p>\nSign Up\u00a0Here<\/a>\u00a0To Receive Weekly FX Insights From Us!<\/h5>\n