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Friday, February 28, 2020 / 5:28 PM / United
Capital Research / Header Image Credit: Shutterstock
Analysis
of Pan African foreign exchange condition showed that the performance was mixed
in 2019. Over the review period, local currencies in Egypt (+11.7%), Tunisia
(+7.7%), South Africa (+2.4%) and Kenya (+0.4%) strengthened, against the US
dollar, thanks increased Foreign Portfolio Investment (FPI) inflows. On the
other hand, local currencies in Angola (-36.0%), Ghana (-14.0%) and Mauritius
(-5.6%) weakened against the greenback. Meanwhile, a continued intervention by
the Central Bank of Nigeria kept the naira largely stable through 2019.
Notably,
Egyptian pound benefited from the dividend of recent reforms as well as
increasing stability which continue to buoy inflows from tourism. Also, the
South African rand shrugged-off a raft of negatives headlines, notably the
faltering momentum in the economy, the risk of a credit-rating downgrade to
junk, and a failing state-owned electricity company. On the contrary, the
Angolan kwanza suffered from the Central Bank's continued control measures on
the exchange rate since abandoning the peg to the USD in Jan-18.
Thus
far in 2020, the Ghanaian cedi have strengthened up to 7.0% against the
greenback, emerging as the best performer in 2020. The strong performance was
buoyed by the country's attractive growth story, an above 10.0% real yields at
the local bond market as well as a successful Eurobond issuance in Feb-2020.
Meanwhile, currencies across other SSA countries under our watch have weakened
against the dollar with South Africa being the worst performer as global risk
continues to rise amid the outbreak of Coronavirus which have weighed on
commodity prices which account for the bulk of export earnings. Also, weak
economic structure in some countries and regulatory uncertainties in others
remains a headwind to currency performance in 2020.
Top
African Stories
Looking
Forward
Angola
Feb-2020 Net Reserves - March 15th
Ghana
Feb-2020 Gross Reserves - March 16th
Kenya
Jan-2020 Money Supply - March 12th
Mar-2020 Benchmark Interest Rate - March 19th
Mauritius
Mar-2020 Interest Rate - March 13th
Morocco
Jan-2020 Money Supply - February 28th
Mar-2020 Interest Rate Announcement - March 12th
Nigeria
Feb-2020 CPI YoY - March 16th
Feb-2020 Money Supply - March 17th
Senegal
Q4-2019 GDP - March 3rd
South Africa
Q4-2019 GDP - March 3rd Feb-2020 Net Reserves - March 6th
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