{"id":3786,"date":"2023-07-07T00:00:00","date_gmt":"2023-07-07T00:00:00","guid":{"rendered":"https:\/\/staging.azafinance.com\/2023\/07\/07\/central-bank-sanctions-boost-value-of-ghanaian-cedi-south-african-investors-keep-watch-on-u-s-fed-actions\/"},"modified":"2023-07-07T00:00:00","modified_gmt":"2023-07-07T00:00:00","slug":"central-bank-sanctions-boost-value-of-ghanaian-cedi-south-african-investors-keep-watch-on-u-s-fed-actions","status":"publish","type":"post","link":"https:\/\/azafinance.com\/central-bank-sanctions-boost-value-of-ghanaian-cedi-south-african-investors-keep-watch-on-u-s-fed-actions\/","title":{"rendered":"Central bank sanctions boost value of Ghanaian cedi, South African investors keep watch on U.S. Fed actions","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"<div class=\"infogram-embed\" data-id=\"1pp2zggjll5ygjsr3k39mwmz25sz0xmem02?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\">The naira crossed into the 770 territory this week to close at USD\/NGN 775 from USD\/NGN 767 recorded last week. Bread producers have warned about the imminent rise in the price of bread following the liberalization of the FX market and the simultaneous withdrawal of the fuel subsidy. The producers lament that the price of baking ingredients which are typically imported, has skyrocketed due to the sudden float of the naira and that the increased cost to transport finished goods would also need to be passed on to the customer. In the coming weeks, we expect continued pressure on the naira in the face of unrelenting FX demand.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400\">Vanguard<\/span><a href=\"https:\/\/www.vanguardngr.com\/2023\/07\/bread-producers-serve-notice-of-imminent-hike-in-prices\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\"> \u2014 Bread producers serve notice of imminent hike in prices<\/span><\/a><\/p>\n<h4><b>Ghanaian Cedi (GH\u00a2)<\/b><\/h4>\n<p><i><span style=\"font-weight: 400\">Compiled by Sakina Seidu<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400\">The cedi experienced a drastic appreciation from USD\/GHS 11.82 to 11.60 over the last week.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">This was as a result of the central bank sanctioning two commercial banks for breaching parts of the Ghana interbank forex market conduct rules. A 30-day hold on their foreign exchange license spanning June 29, 2023, to July 28, 2023, as well as a fine, was the punishment received by these institutions. This elicited a strong response from the market as they tried to avoid the penalty should they flout a foreign market rule. Market participants&#8217; reaction to the sanctions may be what led directly to the appreciation the cedi enjoyed over the past few days.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Going forward, with an increasing demand for dollars from the market, we believe the gains the cedi has enjoyed thus far would be depleted.<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/myjoyonline.com\/cedi-to-continue-stability-against-dollar-others-this-week\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Myjoyonline \u2014\u00a0 Cedi to continue stability against dollar<\/span><\/a><\/p>\n<p><a href=\"https:\/\/www.bog.gov.gh\/wp-content\/uploads\/2023\/06\/NOTICE-OF-SUSPENSION-IRO-FBG-AND-FNB.pdf\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Bank of Ghana \u2014\u00a0 Notice of Suspension<\/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 rand closed out last week at USD\/ZAR 18.8077. The beginning of the new week saw the rand continue trading around this level (in the range of 18.60-18.85) as it continues to trade under the 19.00 level. <\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">The relatively subdued volatility on the USD\/ZAR can be attributed to investors focusing on the U.S. Federal Open Market Committee (FOMC) minutes, which will reveal some clues as to whether there are further interest rate hikes planned for the U.S., which in turn, could indicate more rate increases on the cards for South Africa as well. <\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">From a local perspective, rotational power cuts have eased over the past few weeks \u2014 this has created optimism amongst businesses that the economic situation will improve (provided the power cuts remain subdued and we see a slowdown in inflation). <\/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 the rand to continue trading in the 18.50\u201319.00 range against the dollar. Any surprise that comes from the FOMC minutes could trigger a move beyond these levels in either direction.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/energycentral.com\/news\/reprieve-rand-sa-grid-recovers\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Energy Central \u2014 Reprieve for rand as SA grid recovers<\/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 at USD\/EGP 30.90 on Wednesday morning, very similar to Friday\u2019s close.<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">A glimmer of improving economic conditions was seen this week as the Purchasing Managers\u2019 Index (PMI) for Egypt increased from 47.8 in May, 2023 to 49.01 in June, 2023 according to the S&#038;P Global Egypt PMI report. While still below 50.00, which would signal economic expansion, it\u2019s an improvement nonetheless. <\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><span style=\"font-weight: 400\">The increase in PMI arose after input cost inflation slowed to a 16-month low, and as a result, output prices increased at a slower rate compared to May, 2023.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Elsewhere the government is planning an investment of $1.8 billion in offshore gas exploration, with drilling set to take place till January 2025 for 35 gas wells. The aim is to increase gas production capacity for the country.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">The Egyptian pound is likely to remain stable around USD\/EGP 30.90 in the week ahead.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.zawya.com\/en\/economy\/north-africa\/decline-in-egypts-non-oil-business-sector-slowed-in-june-pmi-xxbxve48\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">ZAWYA \u2014 Decline in Egypt\u2019s non-oil business sector slowed in June \u2014 PMI<\/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 continued to depreciate, pushing up the high cost of living. The shilling is currently trading at a new record low of USD\/KES 140.80. The economic growth of the country has dipped down to 5.3% growth in the first quarter compared to 6.2% in 2022, which is a 0.9% drop. In the month of June, the overall inflation was at 7.9% in June 2023 compared to 8.0% in May. The main drivers of inflation are higher food and fuel prices. The government, through the Monetary Policy Committee by the central bank, suggested further tightening of the monetary policy to anchor inflation expectations and raised the bank rate from 9.5% to 10.5%. The shilling could see some more pressure in the coming week with high dollar demand from oil importers and the manufacturing sectors.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.standardmedia.co.ke\/business\/business\/article\/2001476546\/kenyas-economic-growth-fell-by-09-per-cent\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">The standard \u2014 Kenya&#8217;s economic growth fell by 0.9 per cent<\/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\">USD\/UGX was trading at 3690 on July 5, 2023 strengthening 0.19% from Friday. The Stanbic Bank Uganda PMI fell to 56.4 in June 2023 from 57.4 the previous month, but it remained in expansionary territory for the 11th consecutive month and above the average. Output and new orders both increased in response to improved demand conditions.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Looking ahead, we anticipate that the shilling will weaken to 3696 against the dollar in the coming week as input costs rise due to higher prices for construction materials, electricity, and water, as well as higher purchase prices and staff costs.<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.independent.co.ug\/govt-leadership-needed-to-unlock-ugandas-economic-potential-through-air-access-route-development\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Independent\u00a0 \u2014 Govt leadership needed to unlock Uganda\u2019s economic potential through air access, route development<\/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 continued weakening against the U.S. dollar last week, closing off at USD\/TZS 2,415 on Friday. This week the shilling has weakened even further and is currently trading at 2,423 at the time of writing. This is the weakest the shilling has been against the greenback since 2017, and the shilling has weakened by 3.7% against the U.S. dollar year to date.<\/span><\/p>\n<p><span style=\"font-weight: 400\">According to the Iran ambassador for Tanzania, Hussein Behineh, Tanzanian exports to Iran increased by 35% during the last fiscal year, where the exported value of goods amounted to USD 35 million. While imports from Iran increased by 15% to USD 95 million.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Tanzania\u2019s first brand-new cargo airplane is getting ready for its first planned departure on July 28, 2023. The plane\u2019s routes include five African countries and India, with routes to Dubai and China being considered for the near future.<\/span><\/p>\n<p><span style=\"font-weight: 400\">\u00a0<\/span><span style=\"font-weight: 400\">With U.S. non-farm payrolls being released this Friday, we can expect more volatility between the USD\/TZS currency pair this week. The shilling is expected to continue weakening and to trade around USD\/TZS 2,430 by the end of next week as risk-off sentiment prevails in markets.<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.thecitizen.co.tz\/tanzania\/news\/business\/iran-imports-from-tanzania-increased-by-35-percent-in-2021-22-4291258\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">THE CITIZEN \u2013 \u200b\u200bIran imports from Tanzania increased by 35 percent in 2021\/22<\/span><\/a><\/p>\n<p><a href=\"https:\/\/africa.businessinsider.com\/local\/markets\/tanzania-finds-an-increased-market-base-in-iran\/kzemeer\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Business Insider Africa \u2013 Tanzania finds an increased market base in Iran<\/span><\/a><\/p>\n<p><a href=\"https:\/\/airspace-africa.com\/2023\/07\/04\/air-tanzania-cargo-announces-mumbai-and-dubai-routes-for-new-boeing-767-300f\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">AIRSPACE AFRICA \u2013 Air Tanzania Cargo Announces Mumbai and Dubai Routes for New Boeing 767-300F<\/span><\/a><\/p>\n<p><a href=\"https:\/\/www.thecitizen.co.tz\/tanzania\/news\/business\/atcl-cargo-plane-to-kick-off-with-mumbai-dubai-routes-4292552\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">THE CITIZEN \u2013 ATCL cargo plane to kick off with Mumbai, Dubai routes<\/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\">Burkina Faso raised XOF 183 billion from the IMF to implement its economic reform program.<\/span><\/p>\n<p><span style=\"font-weight: 400\">This program consists of strengthening macroeconomic stability, good governance and budgetary management for stronger and more inclusive growth. It should also contribute to reducing the budget deficit to 3% of GDP by 2027.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.sikafinance.com\/marches\/burkina-faso-183-milliards-fcfa-du-fmi-pour-soutenir-la-stabilite-economique_41493\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Sika finance \u2013 Burkina Faso: 183 billion FCFA from the IMF to support economic stability<\/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\">Cameroon has succeeded in its seventh bond issue in a row by raising nearly XAF 177 billion on the regional financial market.<\/span><\/p>\n<p><span style=\"font-weight: 400\">In a context of monetary policy tightening where the central bank is fighting galloping inflation, this operation nevertheless aroused great interest from investors who hedged the operation at 118% of the amount initially sought.<\/span><\/p>\n<p><span style=\"font-weight: 400\">This funding will enable Cameroon to respond immediately to urgent projects budgeted.\u00a0<\/span><\/p>\n<p><b>Further reading:\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.investiraucameroun.com\/finance\/0407-19551-emprunt-obligataire-2023-le-cameroun-obtient-et-encaisse-pres-de-177-milliards-de-fcfa\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400\">Investir au Cameroun \u2013 Bond loan 2023: Cameroon obtains and collects nearly 177 billion FCFA<\/span><\/a><\/p>\n<p>\u00a0<\/p>\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","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"<p>Nigerian Naira (\u20a6)\u00a0 Compiled by Ikenga Kalu The naira crossed into the 770 territory this week to close at USD\/NGN 775 from USD\/NGN 767 recorded last week. Bread producers have warned about the imminent rise in the price of bread following the liberalization of the FX market and the simultaneous withdrawal of the fuel subsidy. [&hellip;]<\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":1,"featured_media":3787,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[19],"tags":[22,23,24,25,26,27,185,29,30,31,32,298,34,33,303,305],"class_list":["post-3786","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fx-insights","tag-africa-foreign-exchange","tag-cairo","tag-cfa-franc","tag-dollars","tag-egypt","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"],"acf":[],"gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3786","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=3786"}],"version-history":[{"count":0,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/posts\/3786\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media\/3787"}],"wp:attachment":[{"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/media?parent=3786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/categories?post=3786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/azafinance.com\/wp-json\/wp\/v2\/tags?post=3786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}