{"id":3761,"date":"2023-06-02T00:00:00","date_gmt":"2023-06-02T00:00:00","guid":{"rendered":"https:\/\/staging.azafinance.com\/2023\/06\/02\/imf-deal-for-ghana-china-and-cameroon-sign-deal\/"},"modified":"2023-06-02T00:00:00","modified_gmt":"2023-06-02T00:00:00","slug":"imf-deal-for-ghana-china-and-cameroon-sign-deal","status":"publish","type":"post","link":"https:\/\/azafinance.com\/imf-deal-for-ghana-china-and-cameroon-sign-deal\/","title":{"rendered":"IMF deal for Ghana, China and Cameroon sign deal","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"<div class=\"infogram-embed\" data-id=\"1p12qmn7v05nl1hmvkpledv966h66mxwxl1?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 Nigerian naira appreciated marginally against the U.S. dollar from USD\/NGN 766 to USD\/NGN 756 as at the time of writing.<\/span><\/p>\n<p><span style=\"font-weight: 400\">The inauguration of president Bola Tinubu took place this week and was promptly followed by statements that he would be canceling the $10 billion fuel subsidy that is currently in place, as well as plans to target a uniform exchange rate. Bonds and equities reacted positively to the news and rallied on inauguration day. As the above-mentioned reforms take shape in the coming weeks and months, we expect the naira to appreciate gradually against the dollar in the parallel market.<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2023-05-30\/nigeria-s-dollar-bonds-jump-after-new-president-scraps-fuel-caps#xj4y7vzkg\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Bloomberg \u2013 Nigeria Bonds Set for Biggest Gain in Month as Tinubu Takes Over<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/a><a href=\"https:\/\/nairametrics.com\/2023\/05\/22\/why-the-naira-will-likely-be-stronger-in-the-black-market-after-may-29\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Nairametrics \u2013 Why the naira will likely be stronger in the black market after May 29<\/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><\/p>\n<p><span style=\"font-weight: 400\">The Ghanaian cedi traded from 11.50\/90 USD\/GHS as at close of last week to 11.75\/12.05USD\/GHS this week. This comes after increased demand was seen for the U.S. dollar with the market taking advantage of the gains on the cedi following closure of the International Monetary Fund deal earlier in the month. The deal is expected to ease Ghana&#8217;s debt by the year 2028, according to the International Monetary Fund. However, the bulk of the domestic debt restructuring process has been completed. Going in the coming day we project the currency to trade within 11.50-11.90 levels.<\/span><\/p>\n<p><b>Further reading:\u00a0 <\/b><span style=\"font-weight: 400\"><br \/>\n<\/span><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2023-05-31\/ghana-s-cedi-set-to-end-may-among-top-performers-after-imf-deal#xj4y7vzkg\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Bloomberg \u2013 IMF Deal Makes Ghana\u2019s Cedi One of May\u2019s Best Currency Plays<\/span><\/a><\/p>\n<p><a href=\"https:\/\/www.myjoyonline.com\/pressure-mounts-on-ghana-cedi-loses-9-in-value-to-dollar-last-week\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Myjoyonline-Pressure mounts on cedi; loses 9% in value to dollar last week<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/a><a href=\"https:\/\/www.myjoyonline.com\/ghana-expected-to-reach-moderate-risk-of-debt-distress-by-2028-imf\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Myjoyonline-Ghana expected to reach moderate risk of debt distress by 2028 \u2013 IMF<\/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 ended last week on the backfoot &#8211; closing at a USD\/ZAR rate of 19.6171. The new week did not provide any relief, as the Rand trades at around 19.80 levels against the U.S. dollar as of Wednesday. <\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">A lack of clarity on a new U.S debt ceiling agreement, along with weaker than expected Chinese PMI data (indicating that their economic recovery is losing steam), has investors shying away from perceived risky assets. <\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">Back in South Africa, an anticipated increase in electricity demand in winter, along with a continued threat of sanctions and capital outflows (relating to the Russia\/Ukraine allegations) continue to create additional pressure on the rand and is illustrated in its elevated trading levels.<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">Looking at the week ahead, we can expect the rand to trade in the 19.50 &#8211; 20.00 range against the U.S. dollar.<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/edition.cnn.com\/2023\/05\/30\/economy\/china-pmi-economy-intl-hnk\/index.html\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">CNN &#8211; China\u2019s economic recovery loses steam as factory production contracts further<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/a><a href=\"https:\/\/mybroadband.co.za\/news\/government\/493873-reserve-bank-warns-sanctions-over-russia-ukraine-stance-could-hammer-south-africa.html\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Mybroadband &#8211; Reserve Bank warns sanctions over Russia-Ukraine stance could hammer South Africa<\/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><\/p>\n<p><span style=\"font-weight: 400\">The Egyptian pound traded around 30.94 (USD\/EGP) at the time of writing, depreciating marginally from 30.8839 against the U.S. dollar at the close of last week.<\/span><\/p>\n<p><span style=\"font-weight: 400\">In a financial statement to parliament this week, the Egyptian government highlighted their plan to allocate approximately 100 billion pounds towards the manufacturing sector for the 2023\/2024 financial year. The investments are expected to generate circa 390 billion pounds for that financial year and show a 20% increase compared to that of the previous financial year.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Egypt continues to face a shortage of hard currency evident by the deferral of some payments for large wheat imports that are used mainly for subsidized bread. The finance ministry has also stated that they are expecting an increase of around 42% in the cost of food subsidies in the 2023\/2024 financial year.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">In the week ahead, we expect a mild depreciation of the Egyptian pound against the U.S. dollar in light of recent dollar strength. S&#038;P Global PMI sits on the economic calendar for 5 June and should shed some light on manufacturing inflation conditions in Egypt.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.egypttoday.com\/Article\/1\/124730\/Egypt-s-gov-t-allocates-LE-100-7-bln-as\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Egypt today \u2013 Egypt&#8217;s gov&#8217;t allocates LE 100.7 bln as direct investments into manufacturing secto<\/span><span style=\"font-weight: 400\">r<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/a><a href=\"https:\/\/www.aljazeera.com\/news\/2023\/5\/26\/egypt-defers-payments-for-wheat-imports-amid-dollar-crunch\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Reuters \u2013 Egypt defers payments for wheat imports amid dollar crunch<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/a><\/p>\n<h4><strong>Kenyan Shilling (KSh)<\/strong><\/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 dropped to the levels of 138.45\/80 (USD\/KSh) from 137.70 \/138.25 (USD\/KSh) the previous week due to the sustained pressure from oil importers and the manufacturing sector. During the Monetary Policy Committee Meeting held on Monday, the Central Bank of Kenya (CBK) retained the base lending rate at 9.5%.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">In an effort to support the Kenyan economy as it confronts high debts and a weakening currency, the World Bank on Tuesday approved a $1 billion loan. The lending will be done through a Development Policy Operations loan, aimed at reducing the debt burden, improving agricultural competitiveness and improving governance. The CBK foreign exchange reserves continue to provide adequate cover and a buffer against any short term shocks in the forex market and currently stand at USD 6,495 million (3.61 months of import cover). The shilling could see some more pressure in the coming week related to increased end month forex demand.<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.reuters.com\/world\/africa\/world-bank-approves-1-billion-loan-kenya-2023-05-30\/?rpc=401&#038;\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Reuters &#8211; World Bank approves $1 billion loan to Kenya<\/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\">This Wednesday, May 31, USD\/UGX rose 0.40% from last Friday to trade at 3,775.00. In retrospect, USD\/UGX has risen 1.2% over the past four weeks. The Uganda Communications Commission (UCC) announced this week that part of the 36 billion UGX from the Universal Service Access Fund will be used to expand ICT services and deepen the adoption of telecommunications services across the country.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Looking ahead, <\/span><span style=\"font-weight: 400\">we forecast the Ugandan shilling will strengthen against the U.S. dollar<\/span> <span style=\"font-weight: 400\">due to the positive news from the UCC as well as Tanzania Port Authority (TPA) currently in talks with Uganda as Uganda plans to start oil production in 2025.<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.monitor.co.ug\/uganda\/business\/markets\/ucc-to-invest-shs36b-in-expanding-digital-economy--4252760\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Monitor- UCC to invest Shs36b in expanding digital economy<\/span><\/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 weakened further against the U.S. dollar this week and on May 25, 2023 hit its weakest level since 2017 at USD\/TZS 2,366. This week the shilling has remained around the same levels and is currently at USD\/TZS 2,365 at the time of writing.<\/span><\/p>\n<p><span style=\"font-weight: 400\">While Tanzania\u2019s FX rate seems to be weakening gradually, the situation on the ground seems to be indicating the contrary. Demand for the 364-day Treasury Bill increased this past month resulting in its yield moving from 6.74% last month to 7.22% in last week\u2019s auction. Additionally, the Dar es Salaam Stock Exchange (DSE) has reported a bullish market for the past three weeks.<\/span><\/p>\n<p><span style=\"font-weight: 400\">As investors continue a risk off approach, we expect the Tanzanian shilling to continue weakening against the U.S. dollar in the week ahead. We expect USD\/TZS to continue trading around 2,366 and possibly move to as high as 2,370.<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.africa-press.net\/tanzania\/all-news\/dse-experiences-three-weeks-of-bull-run\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">AFRICA PRESS \u2013 DSE experiences three weeks of bull run<\/span><\/a><\/p>\n<p><a href=\"https:\/\/think.ing.com\/articles\/the-commodities-feed-risk-off-sentiment-prevails\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">ING\u00a0 \u2013 The Commodities Feed: Risk-off sentiment prevails<\/span><\/a><\/p>\n<h4><b>West African CFA Franc Region (XOF)<\/b><\/h4>\n<p><i><span style=\"font-weight: 400\">Compiled by Jean C\u00e9dric Nando KOUA<\/span><\/i><b>\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400\">In order to cover the weekly needs of commercial banks, the central bank injected 6.300 billion XOF \u2013 remunerated at a minimum of 4.7% \u2013 against a total demand estimated at 6,681.61 billion XOF. These conditions for the refinancing of commercial banks follow the tightening of monetary policies initiated by the central bank in an effort to bring inflation below the economic union threshold of 3%.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.sikafinance.com\/marches\/umoa-la-bceao-injecte-6-300-milliards-fcfa-sur-le-marche-interbancaire_40957\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Sika finance \u2013 WAMU: The BCEAO injects 6,300 billion FCFA into the interbank 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\">As part of the 2020-2030 national development strategy, Cameroon signed a financing agreement of XAF 18,367 billion with China on May 29. This funding should be injected \u2013 both in the public and private sectors \u2013 into projects with high potential.<\/span><\/p>\n<p><span style=\"font-weight: 400\">The partnership is timely as it will enable Cameroon to\u00a0 implement its development strategy.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.sikafinance.com\/marches\/le-fonds-souverain-chinois-projette-investir-30-milliards-usd-au-cameroun_40976\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Sika finance \u2013 The Chinese sovereign wealth fund plans to invest 30 billion USD in Cameroon<\/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<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<\/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 Nigerian naira appreciated marginally against the U.S. dollar from USD\/NGN 766 to USD\/NGN 756 as at the time of writing. The inauguration of president Bola Tinubu took place this week and was promptly followed by statements that he would be canceling the $10 billion [&hellip;]<\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":1,"featured_media":3762,"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-3761","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\/3761","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=3761"}],"version-history":[{"count":0,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3761\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media\/3762"}],"wp:attachment":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media?parent=3761"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/categories?post=3761"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/tags?post=3761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}