{"id":473831,"date":"2021-10-24T22:50:09","date_gmt":"2021-10-24T22:50:09","guid":{"rendered":"https:\/\/www.kapitalafrik.com\/?p=473831"},"modified":"2021-10-24T22:50:09","modified_gmt":"2021-10-24T22:50:09","slug":"african-currencies-weekly-insight-4","status":"publish","type":"post","link":"https:\/\/www.financialafrik.com\/en\/2021\/10\/24\/african-currencies-weekly-insight-4\/","title":{"rendered":"African currencies weekly insight"},"content":{"rendered":"<div class=\"pdfprnt-buttons pdfprnt-buttons-post pdfprnt-top-bottom-left\"><\/div><p><strong>Support from Biden\u2019s J&amp;J vaccine donation\u00a0<\/strong><br \/>\nPresident Joe Biden\u2019s commitment to donate a further 17 million doses of the Johnson &amp; Johnson Covid-19 vaccine to the African Union, adding to the 50 million the US had previously sent, capped a useful visit by Kenyan President Uhuru Kenyatta. While such numbers are dwarfed by the billions still needed, this additional batch will help support African countries with lower vaccine penetration and in turn assist in mitigating some of the economic impacts of the pandemic. We are also watching closely amid signs that the Biden Administration is keen to ramp up engagement with African nations to boost trade.<\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone wp-image-473836 \" src=\"https:\/\/www.kapitalafrik.com\/wp-content\/uploads\/2021\/10\/Murega-Mungai.jpg\" alt=\"\" width=\"254\" height=\"241\" \/><\/p>\n<p><strong>Michael Nderitu<\/strong><br \/>\nHead of Trading, AZA<\/p>\n<p><strong>Naira to hold firm as FX liquidity improves<\/strong><br \/>\nThe Naira held steady on the unofficial market this week, trading at 572 to the dollar. Nigerian Central Bank Governor Godwin Emefiele told investors at a meeting in New York that the country\u2019s new Dangote refinery\u2014which is slated to begin operations early next year\u2014will save Nigeria up to 30% of FX spend on petroleum imports. FX reserves increased to $39.8bn last week from $38.4bn the previous week, according to the central bank\u2019s 30-day moving average benchmark. Meantime, Nigeria\u2019s excess crude account balance has continued to deplete, standing at $60m this month from $70m in February 2020. That marks a roughly 98% fall since the account was set up in 2014. Balancing such factors, we expect the Naira to remain stable at around 570 in the coming days given decent FX liquidity available to commercial banks.<\/p>\n<p><img decoding=\"async\" class=\"wp-image-473827 aligncenter\" src=\"https:\/\/www.kapitalafrik.com\/wp-content\/uploads\/2021\/10\/FX-300x158.png\" alt=\"\" width=\"621\" height=\"326\" srcset=\"https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-300x158.png 300w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-600x315.png 600w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-768x404.png 768w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-696x366.png 696w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-799x420.png 799w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-605x318.png 605w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX.png 936w\" sizes=\"(max-width: 621px) 100vw, 621px\" \/><\/p>\n<p><strong>Cedi pressure poised to ease<\/strong><br \/>\nThe Cedi depreciated against the dollar this week, trading at 6.08 compared to 6.07 at last Friday\u2019s close amid increased FX demand from investors repatriating bond maturity proceeds. Ghana\u2019s central bank continues to intervene in the market via its forward FX auctions, this week selling a total of $125m. Also this week, the head of fintech and innovation at the Bank of Ghana, Kwame Oppong, said the yet-to-be-launched e-Cedi digital currency will be designed to work offline through the use of smart cards in an effort to boost financial inclusion for people without a bank account. We expect the pressure on the Cedi to ease in the coming days.<\/p>\n<p><img decoding=\"async\" class=\"wp-image-473828 aligncenter\" src=\"https:\/\/www.kapitalafrik.com\/wp-content\/uploads\/2021\/10\/FX-1-300x115.png\" alt=\"\" width=\"641\" height=\"248\" \/><\/p>\n<p><strong>High commodity prices to sustain Rand gains<\/strong><br \/>\nThe Rand strengthened against the dollar this week, appreciating to 14.42 from 14.60 at last week\u2019s close after iffy US manufacturing data piled pressure on the greenback. Firmer commodity prices, upbeat emerging market risk sentiment and rising foreign FX inflows into South Africa\u2019s bond markets also supported the Rand. In light of the above, we project sustained gains against the dollar in the coming week.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-473829 aligncenter\" src=\"https:\/\/www.kapitalafrik.com\/wp-content\/uploads\/2021\/10\/FX-2-300x127.png\" alt=\"\" width=\"617\" height=\"261\" srcset=\"https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-2-300x127.png 300w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-2-600x254.png 600w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-2-768x325.png 768w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-2-696x294.png 696w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-2-605x256.png 605w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-2.png 936w\" sizes=\"(max-width: 617px) 100vw, 617px\" \/><\/p>\n<p><strong>Pound steady as Egypt outlines debt strategy<\/strong><br \/>\nThe Pound was broadly flat against the dollar this week, trading at 15.66\/15.77. Egypt\u2019s Finance Minister Mohamed Maait said the government is targeting growth of 5.4% for the 2021\/22 fiscal year and aiming to reduce the total deficit to 6.7% from around 7.4% last year. Maait said the government will also seek to sustain the downward path of the country\u2019s debt-to-GDP ratio by implementing a public debt management strategy based on diversifying sources of financing and issuing bonds. We expect to see a stable Pound over the coming seven days.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-473837\" src=\"https:\/\/www.kapitalafrik.com\/wp-content\/uploads\/2021\/10\/Terry-Karanja-251x300.jpg\" alt=\"\" width=\"251\" height=\"300\" srcset=\"https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/Terry-Karanja-251x300.jpg 251w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/Terry-Karanja.jpg 255w\" sizes=\"(max-width: 251px) 100vw, 251px\" \/><br \/>\n<strong>Terry Karanja\u00a0<\/strong><br \/>\nTreasury Associate, AZA<\/p>\n<p><strong>Kenya\u2019s energy-tourism mismatch drags Shilling lower<\/strong><br \/>\nThe Shilling\u2019s woes against the dollar deepened this week, trading at 111.15\/111.45 compared to 110.85\/111.15 at the end of last week as importer demand for the greenback in the energy and merchandise sectors outweighed FX supply. Kenya\u2019s central bank has been helping prevent a sharper decline, with foreign currency reserves falling to $9.3bn from $9.4bn at the previous week\u2019s reading. Much of the current supply imbalance comes as the country\u2019s economy reopens gradually, with demand for dollars ramping up while inflows from sectors such as tourism remain subdued from the effects of the pandemic. That mismatch is likely to persist, so we expect the pressure on the Shilling to continue in the near term.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-473832 aligncenter\" src=\"https:\/\/www.kapitalafrik.com\/wp-content\/uploads\/2021\/10\/FX-3-300x126.png\" alt=\"\" width=\"586\" height=\"246\" srcset=\"https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-3-300x126.png 300w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-3-600x253.png 600w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-3-768x323.png 768w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-3-696x293.png 696w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-3-605x255.png 605w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-3.png 936w\" sizes=\"(max-width: 586px) 100vw, 586px\" \/><\/p>\n<p><strong>Ugandan Shilling pressure unlikely to ease<\/strong><br \/>\nThe Shilling depreciated further this week, trading at 3620\/3630 to the dollar from 3590\/3600 at last week\u2019s close amid increased importer demand for FX. The Bank of Uganda this week held its main interest rate at 6.5% while projecting the economy will expand between 3.5% and 3.8% in the 2021\/22 financial year and 5.5% and 6% in the following year, lower than previously forecast given the uncertainty caused by the coronavirus pandemic. We expect pressure on the Shilling to continue in the coming week due to increased dollar demand from importers and corporates.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-473833 aligncenter\" src=\"https:\/\/www.kapitalafrik.com\/wp-content\/uploads\/2021\/10\/FX-4-300x115.png\" alt=\"\" width=\"636\" height=\"246\" \/><\/p>\n<p><strong>Tanzanian Shilling outlook bolstered by tourism stimulus\u00a0<\/strong><br \/>\nThe Shilling was stronger against the dollar this week, appreciating to 2295\/2305 from 2300\/2310 at last week\u2019s close, boosted by higher inflows into the economy from the agricultural sector. The Tanzanian government is seeking to revive the country\u2019s tourism sector, with President Samia Suluhu Hassan this week announcing a TZS90.2bn stimulus package to support the industry, which had been dampened by the pandemic. We expect the Shilling to remain stable due to inflows from investors and agricultural commodities such as coffee and cashew nuts.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-473834\" src=\"https:\/\/www.kapitalafrik.com\/wp-content\/uploads\/2021\/10\/FX-5-300x137.png\" alt=\"\" width=\"300\" height=\"137\" srcset=\"https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-5-300x137.png 300w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-5-600x273.png 600w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-5-768x350.png 768w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-5-696x317.png 696w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-5-923x420.png 923w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-5-605x275.png 605w, https:\/\/www.financialafrik.com\/en\/wp-content\/uploads\/2021\/10\/FX-5.png 936w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p>\n<div class=\"pdfprnt-buttons pdfprnt-buttons-post pdfprnt-top-bottom-left\"><\/div>","protected":false},"excerpt":{"rendered":"<p>Support from Biden\u2019s J&amp;J vaccine donation\u00a0 President Joe Biden\u2019s commitment to donate a further 17 million doses of the Johnson &amp; Johnson Covid-19 vaccine to the African Union, adding to the 50 million the US had previously sent, capped a useful visit by Kenyan President Uhuru Kenyatta. While such numbers are dwarfed by the billions<\/p>\n","protected":false},"author":536766,"featured_media":473835,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"aside","meta":{"pmpro_default_level":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"translated_post_url_fr":"","_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[12048,12591],"tags":[],"class_list":{"0":"post-473831","1":"post","2":"type-post","3":"status-publish","4":"format-aside","5":"has-post-thumbnail","7":"category-chronicles","8":"category-feature","9":"post_format-post-format-aside","10":"pmpro-has-access"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.5 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>African currencies weekly insight - Financial Afrik<\/title>\n<meta name=\"description\" content=\"Headed by Adama Wade and his team of 20 journalists, Kapital Afrik offers strategic and financial information to executives and managers. 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The aim of Kapital Afrik is to provide financial and political news, give priority to human entrepreneurial experiences, lend life to economic policies, givemeaning to statistics. Our \u201cexaggerated pretensions\u201d inspire us. We will strive, and gradually, to conceive, comfort and reach them. Three versions, three approaches and a global vision. The website is constantly on the news. The newsletter relays information every morning to executives, bankers, university financiers, students. The monthly edition analyzes the information and explains the setbacks. A single credo initiates our journalistic approach: information = actors, facts = a pluralistic vision. 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