{"id":3752,"date":"2023-05-19T00:00:00","date_gmt":"2023-05-19T00:00:00","guid":{"rendered":"https:\/\/staging.azafinance.com\/2023\/05\/19\/nigerias-inflation-concerns-persist-south-africas-rand-under-pressure\/"},"modified":"2023-05-19T00:00:00","modified_gmt":"2023-05-19T00:00:00","slug":"nigerias-inflation-concerns-persist-south-africas-rand-under-pressure","status":"publish","type":"post","link":"https:\/\/azafinance.com\/nigerias-inflation-concerns-persist-south-africas-rand-under-pressure\/","title":{"rendered":"Nigeria\u2019s Inflation Concerns Persist, South Africa\u2019s Rand Under Pressure","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"<div class=\"infogram-embed\" data-id=\"1pmj16w2j6dny0u3gvdny2nqwvszgzyxgk7?live\" data-type=\"interactive\"><\/div><script>!function(e,t,s,i){var n=\"InfogramEmbeds\",o=e.getElementsByTagName(\"script\"),d=o[0],r=\/^http:\/.test(e.location)?\"http:\":\"https:\";if(\/^\\\/{2}\/.test(i)&&(i=r+i),window[n]&&window[n].initialized)window[n].process&&window[n].process();else if(!e.getElementById(s)){var a=e.createElement(\"script\");a.async=1,a.id=s,a.src=i,d.parentNode.insertBefore(a,d)}}(document,0,\"infogram-async\",\"\/\/e.infogram.com\/js\/dist\/embed-loader-min.js\");<\/script>\n<h4><b>Nigerian Naira (\u20a6)\u00a0<\/b><\/h4>\n<p><i><span style=\"font-weight: 400\">Compiled by Ikenga Kalu<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400\">Over the week, the naira depreciated from USD\/NGN 748 to USD\/NGN 755 as at the latest closing price. The naira weakening beyond the 750 psychological resistance is testament to the spike in FX demand from importers. <\/span><span style=\"font-weight: 400\">Inflation continues to trend upward and was recorded at an annual rate of 22.22% in April, up from 22.04% in March, despite multiple interest rate hikes by the Nigerian central bank<\/span><span style=\"font-weight: 400\">. The continued upward trend in inflation is due to higher energy prices, fx rate volatility, and the recent nationwide cash crunch experienced as a result of the policy to replace naira notes . We expect the currency to continue to lose ground against the dollar in the coming days as more naira becomes available to support a pick-up in FX demand.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/nairametrics.com\/2023\/05\/15\/nigerias-inflation-rate-rises-to-22-22-in-april-2023-as-cbn-rate-hikes-fail-to-works\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Nairametrics \u2014 Nigeria\u2019s inflation rate rises to 22.22% in April 2023 as CBN rate hikes fail to work<\/span><\/a><\/p>\n<h4><b>Ghanaian Cedi (GH\u00a2)<\/b><\/h4>\n<p><i><span style=\"font-weight: 400\">Compiled by Murega Mungai<\/span><\/i><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">The cedi rallied to USD\/GHS 10.90 on May 17 from levels of USD\/GHS 11.75 at the end of last week after\u00a0 Finance Minister Mohammed Amin Adam disclosed that Ghana would receive $1.2 billion from the International Monetary Fund. Of this amount, $600 million will be disbursed within a week and subsequent tranches by December, subject to Ghana meeting certain conditions under the programme. The country is expected to receive about $3 billion from an extended credit facility arrangement within three years in its bailout. In the coming days, we project the cedi to remain fairly strong as the market reacts positively to the IMF deal.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.myjoyonline.com\/cedi-gains-more-grounds-going-for-%C2%A211-30-y-t-d-loss-is-8-7\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Myjoyonline \u2014 Cedi gains more grounds, going for \u00a211.30; Y-T-D loss is 8.7%<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/a><a href=\"https:\/\/www.reuters.com\/world\/africa\/ghana-expects-first-600-mln-tranche-imf-after-wednesday-meeting-minister-2023-05-14\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Reuters \u2014 Ghana expects first $600 mln tranche from IMF after Wednesday meeting \u2013 minister<\/span><\/a><\/p>\n<h4><b>South African Rand (R)\u00a0<\/b><\/h4>\n<p><i><span style=\"font-weight: 400\">Compiled by Alex Barmuta<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400\">The South African rand closed last week trading at 19.3265 against the U.S. dollar. On Monday the USD\/ZAR attempted to recover some ground, however, it was unable to break below the 19.00 level. As of Wednesday, the rand continues to trade at around the 19.30 levels. <\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">Allegations about South Africa sending arms from its Simon\u2019s Town naval base to Russia triggered a rand sell-off, amid concerns about economic sanctions. While South Africa has denied the allegations, President Cyril Ramaphosa has launched an inquiry into the incident in question \u2014 which U.S. intelligence sources claim took place last December. Further pressure on the rand is driven by continued rotational power cuts, the release of retail sales figures showing that sales fell 1.6% year-on-year in March, and an increase in the unemployment rate in Q1 to 32.9%. It is worth noting that despite the overall increase in unemployment, the city of Cape Town\u2019s unemployment rate fell from 30% to 26% year-on-year in March. <\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">Looking ahead, we can expect high levels of volatility in rand pairs. Any news indicating a reduction in the tensions over the Russian arms incident could trigger some rand strength, leading the USD\/ZAR to possibly break below the 19.00 level. On the other hand, if the allegations are proven to be correct and sanctions become a real possibility, we could see the rand move above the 19.50 level against the dollar, and possibly beyond. <\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/businesstech.co.za\/news\/finance\/688801\/the-rand-is-at-a-tipping-point\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Business tech \u2014 The rand is at a tipping point<\/span><\/a><\/p>\n<h4><b>Egyptian Pound (EGP)<\/b><\/h4>\n<p><i><span style=\"font-weight: 400\">Compiled by Mitchell Diedrick<\/span><\/i><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">The Egyptian pound closed off last week marginally stronger against the U.S. dollar at 30.65 after averaging 30.84 in last week\u2019s trade. It has returned to trading at weaker levels of USD\/EGP 30.90 this week. <\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">The government seems to be holding firm on its commitment to the IMF on privatization of state-owned entities evident by a partial sale of Telecom Egypt. On Sunday, May 14, 2023 the Egyptian Finance Ministry announced that a 9.5% stake in the company was sold to investors for approximately $122 million. <\/span><span style=\"font-weight: 400\">Stakes in two additional state-owned entities are expected to sell before the end of the financial year in June, 2023. The move shows greater commitment to privatization and reform of the Egyptian economy. <\/span><span style=\"font-weight: 400\">In the week ahead we expect the Egyptian pound to remain range bound between USD\/EGP 30.95 and 30.80.<\/span><\/p>\n<p><b>Further reading:\u00a0 <\/b><span style=\"font-weight: 400\"><br \/>\n<\/span><a href=\"https:\/\/www.aljazeera.com\/news\/2023\/5\/14\/government-sells-9-5-of-state-controlled-telecom-egypt\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Aljazeera \u2013 Government sells 9.5% of state-controlled Telecom Egypt<\/span><\/a><\/p>\n<h4><b>Kenyan Shilling (KSh)<\/b><\/h4>\n<p><i><span style=\"font-weight: 400\">Compiled by Terry Karanja<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400\">The Kenyan shilling continues to drop this week and hit a fresh record low of 136.95\/137.60, down from last week\u2019s close of 136.65\/85, with inflation expected to elevate further.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Moody\u2019s Investors Service downgraded Kenya\u2019s long-term foreign currency and local currency issuer ratings to B3\u00a0 from B2 and also lowered local and foreign currency country debt ceilings, citing increased liquidity risks faced by the Kenyan government. The ratings agency placed Kenya on review for further downgrade. The shilling could see some more pressure in the coming week, given increased FX demand from fuel importers relative to slower supply of hard currency in the country.<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/kenyanwallstreet.com\/moodys-places-kenyas-government-ratings-on-review-for-downgrade\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">The Kenyan Wall Street \u2014 Moody\u2019s Places Kenya\u2019s Government Ratings on Review for Downgrade<\/span><\/a><\/p>\n<h4><b>Ugandan Shilling (USh)<\/b><\/h4>\n<p><i><span style=\"font-weight: 400\">Compiled by Yadhav Panday<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400\">\u200b\u200bThis Wednesday, May 17, 2023, the Ugandan shilling traded at USD\/UGX 3,720, appreciating 0.05% from last week\u2019s close against the dollar. Looking back, USD\/UGX has gained 0.13% in the last four weeks. Its value has increased by 2.06% in the last year.\u00a0 This was mainly influenced by <\/span><a href=\"https:\/\/tradingeconomics.com\/uganda\/interest-rate\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Ug<\/span><\/a><span style=\"font-weight: 400\">anda keeping its key interest rate at 10% and the slow GDP rate. <\/span><span style=\"font-weight: 400\">The Uganda National Oil Company (UNOC) and DGR Energy Turaco Uganda SMC have paid the Ministry of Energy $2 million in research expenses, as well as exploration costs and fees.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Looking ahead, we forecast the shilling to weaken against the dollar over the coming week.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/africa.businessinsider.com\/local\/markets\/ugandas-ministry-of-energy-earns-dollar2-million-from-latest-oil-block-licenses\/42xtlp8\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Africa business insider \u2013\u00a0 Uganda&#8217;s Ministry of Energy earns $2 Million from latest oil block licenses<\/span><b>\u00a0<\/b><\/a><\/p>\n<h4><b>Tanzanian Shilling (TSh)<\/b><\/h4>\n<p><i><span style=\"font-weight: 400\">Compiled by Kristin Van Helsdingen<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400\">The Tanzanian shilling continued its weakening trend,hitting its lowest level since 2019 at 2,356 last week. There was not much volatility between the currency pair this week as it traded between 2,354 and 2,356. This week, the USD\/TZS mid-rate has weakened even further and has been trading around 2,357 and 2,358.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Store owners in Kariakoo, a business hub in Dar es Salaam, closed shop earlier this week and refused to reopen until the government addressed their grievances citing unfair monetary charges and seizure of their goods by tax authorities. Prime Minister Kassim Majaliwa took to the streets on Wednesday to drive an agreement with the business owners to encourage continuation of business.<\/span><\/p>\n<p><span style=\"font-weight: 400\">As the government prepares for the 2023\/24 fiscal year budget speech, Health Minister Ummy Mwalimu has requested that the health services\u2019 budget be increased to 1.2 trillion Tanzanian shillings, from 1.1 trillion.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">In the week ahead, we expect the shilling to weaken and to head lower toward 2,360 against the dollar, but stopping short of this level.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.africa-press.net\/tanzania\/all-news\/health-ministry-outlines-budget-priority-areas\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Africa Press<\/span><\/a><a href=\"https:\/\/www.aljazeera.com\/news\/2023\/5\/14\/government-sells-9-5-of-state-controlled-telecom-egypt\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\"> \u2013<\/span><\/a><a href=\"https:\/\/www.africa-press.net\/tanzania\/all-news\/health-ministry-outlines-budget-priority-areas\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\"> Health Ministry outlines budget priority areas<\/span><\/a><\/p>\n<p><a href=\"https:\/\/www.thecitizen.co.tz\/tanzania\/news\/national\/sh1-67-trillion-education-budget-to-focus-on-five-key-areas-4237610\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">THE CITIZEN<\/span><\/a><a href=\"https:\/\/www.aljazeera.com\/news\/2023\/5\/14\/government-sells-9-5-of-state-controlled-telecom-egypt\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\"> \u2013<\/span><\/a><a href=\"https:\/\/www.thecitizen.co.tz\/tanzania\/news\/national\/sh1-67-trillion-education-budget-to-focus-on-five-key-areas-4237610\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\"> Sh1.67 trillion education budget to focus on five key areas<\/span><\/a><\/p>\n<p><a href=\"https:\/\/www.thecitizen.co.tz\/tanzania\/news\/national\/businesses-in-kariakoo-count-losses-as-traders-stage-protest-4237320\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">THE CITIZEN<\/span><\/a><a href=\"https:\/\/www.aljazeera.com\/news\/2023\/5\/14\/government-sells-9-5-of-state-controlled-telecom-egypt\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\"> \u2013<\/span><\/a><a href=\"https:\/\/www.thecitizen.co.tz\/tanzania\/news\/national\/businesses-in-kariakoo-count-losses-as-traders-stage-protest-4237320\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\"> Businesses in Kariakoo count losses as traders stage protest<\/span><\/a><\/p>\n<p><a href=\"https:\/\/www.thecitizen.co.tz\/tanzania\/news\/national\/video-kariakoo-traders-await-to-meet-with-prime-minister-4237794\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">THE CITIZEN<\/span><\/a><a href=\"https:\/\/www.aljazeera.com\/news\/2023\/5\/14\/government-sells-9-5-of-state-controlled-telecom-egypt\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\"> \u2013<\/span><\/a><a href=\"https:\/\/www.thecitizen.co.tz\/tanzania\/news\/national\/video-kariakoo-traders-await-to-meet-with-prime-minister-4237794\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\"> VIDEO: Kariakoo traders await to meet with Prime Minister<\/span><\/a><\/p>\n<h4><b>West African CFA Franc Region (XOF)\u00a0<\/b><\/h4>\n<p><i><span style=\"font-weight: 400\">Compiled by Jean C\u00e9dric Nando KOUA<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400\">Senegal has successfully raised XOF 38 billion on the securities market.<\/span><\/p>\n<p><span style=\"font-weight: 400\">After Cote D\u2019Ivoire, Mali, Benin and Togo, investors responded favorably to the Senegalese securities issue by offering up to XOF 59.83 billion against an initial amount of XOF 35 billion sought. The Senegalese treasury finally retained XOF 38 billion and offered investors a weighted average yield of 6.69% for the 1-year securities and 6.99% for the 3-year bonds.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.sikafinance.com\/marches\/umoa-le-senegal-empoche-38-milliards-fcfa-sur-le-marche-des-titres-publics_40705\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Sika finance \u2014 UMOA: Senegal pockets 38 billion FCFA on the public securities market<\/span><\/a><\/p>\n<h4><b>Central African CFA Franc Region (XAF)<\/b><\/h4>\n<p><i><span style=\"font-weight: 400\">Compiled by Jean C\u00e9dric Nando KOUA<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400\">Last week the central bank proceeded with a liquidity takeover operation with the banks of the XAF region. The central bank formulated an offer to source XAF remunerated at 0.75% over seven days and was able to bring in to 100 billion. <\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">After four successive increases in the key rate, the bank suspended the injection of liquidity into the market. This is part of the tightening of monetary policy initiated since December 2021 to help fight against inflation, which is expected to reach 6.4% for 2023 against an economic union target of 3%.<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.investiraucameroun.com\/finance\/1605-19381-la-beac-densifie-son-operation-d-assechement-des-banques-en-portant-ses-ponctions-hebdomadaires-a-100-milliards-de-fcfa\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Investir au Cameroun \u2014 The Beac densifies its operation to drain banks by increasing its weekly punctures to 100 billion FCFA<\/span><\/a><\/p>\n<p>\u00a0<\/p>\n<div class=\"entry-content lqd-single-post-content clearfix pos-rel\">\n<div class=\"container\">\n<div class=\"entry-content lqd-single-post-content clearfix pos-rel\">\n<div class=\"container\">\n<p><em>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<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"<p>Nigerian Naira (\u20a6)\u00a0 Compiled by Ikenga Kalu Over the week, the naira depreciated from USD\/NGN 748 to USD\/NGN 755 as at the latest closing price. The naira weakening beyond the 750 psychological resistance is testament to the spike in FX demand from importers. Inflation continues to trend upward and was recorded at an annual rate [&hellip;]<\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":1,"featured_media":3753,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[19],"tags":[22,24,25,27,185,29,30,31,32,298,34,33,303,305,494],"class_list":["post-3752","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fx-insights","tag-africa-foreign-exchange","tag-cfa-franc","tag-dollars","tag-egyptian-pound","tag-foreign-exchange","tag-fx","tag-fx-insights","tag-ghana","tag-ghana-cedi","tag-kenyan-shilling-rate","tag-naira","tag-rand-rate","tag-tanzanian-shilling-rate","tag-ugandan-shilling-rate","tag-usa"],"acf":[],"gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3752","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=3752"}],"version-history":[{"count":0,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3752\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media\/3753"}],"wp:attachment":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media?parent=3752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/categories?post=3752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/tags?post=3752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}