The cedi depreciated slightly against the dollar this week, slipping to 6.103 from 6.08 at last week’s close despite recent interventions by the Bank of Ghana to ease pressure on the currency through its currency auctions. in the long term.
Rising borrowing costs and investor preference for dollar-denominated securities have increased pressure on the Cedi, although we expect this pressure to begin to ease in the near term after approval of the Cedi. a $ 75 million loan from the African Development Bank to Ghana Infrastructure Investment. Fund, which will help stimulate the supply of dollars.
Since the Sudanese army seized power on Monday and arrested the prime minister, the country has suffered widespread violence, protests and destruction of property. Sudan has seen 17 coup attempts in its history, the largest number on the continent – five were successful (not counting Monday’s coup).
The latest military takeover will further strain the country’s economic progress, with the United States among those suspending aid in response to the coup. The African Union has also suspended Sudan from all AU activities until civilian rule is restored.
Such responses will reduce inward investment and stifle funding for much-needed development and infrastructure projects, damaging the economy and weakening growth.
Nigeria’s foreign exchange reserves at two-year high to stabilize the Naira
The Naira has changed little in the unofficial market this week, trading around 570 to the dollar. Amid ever higher oil export prices, the country’s foreign exchange reserves rose again, peaking at about two years at $ 41.5 billion, according to the benchmark moving average of 30 central bank days.
Nigeria also officially launched its digital currency, the e-Naira, this week after being delayed in a complaint against the central bank for trademark infringement. Bank governor Godwin Emefiele said the e-Naira will boost financial inclusion, lower the cost of handling cash, and allow transparent welfare payments to eligible citizens. We expect the Naira to continue trading around the 570 handle in the near term.
Power cuts cloud outlook for Rand amid commodity pullback
The rand depreciated against the dollar this week, trading at 14.84 from 14.75 at the close of last week due to lower commodity prices, especially precious metals.
The country’s economy is also facing crippling electricity supply problems, with public energy company Eskom announcing a series of blackouts this week. As global risk sentiment remains mixed, the decline in commodity prices and the country’s electricity problems could lead to further weakening of the rand in the coming days.
Egyptian credit outlook optimistic to keep the pound stable
The pound was unchanged against the dollar this week, trading at 15.66 / 15.76 after rating agency Standard & Poor’s confirmed Egypt’s sovereign rating at B for the fourth time since start of the pandemic.
The agency praised the country for its flexible and balanced political framework to deal with the pandemic, as well as for the implementation of economic and structural reforms. We expect the pound to remain stable over the coming week.
High fuel prices weigh on Kenya’s foreign exchange reserves as the shilling slips
The shilling weakened further this week, from 110.95 / 111.15 to 111 / 111.15 amid a persistent dollar shortage, exacerbated by increased demand from oil and commodity importers and rising prices. inflation, especially fuel prices.
This demand has led to a decline in foreign exchange reserves as the central bank tries to ease the pressure on the currency. Reserves fell to $ 9.23 billion this week from $ 9.26 billion on Oct. 14, sufficient for 5.64 months of import coverage. We expect month-end demand for the dollar to put even more pressure on the shilling over the coming week.