SSA Currency Market in 2020: Broad Depreciation Across Board


Friday, January 08, 2021/ 12:00PM / United Capital Research / Header Image Credit: Brandspur


In 2020, SSA currencies under our watch depreciated against the US dollar, except the CFA franc which firmed 9.3% against the greenback as at the end of the year. The depreciation recorded was majorly attributable to the Covid-19 pandemic, amid the demand shock which affected export demand for commodities from China, one of the region's most important trading partners.


Apart from Zambia (-33.7%) which saw the worst currency performance due to the debt crisis, currency pressure on the region reflected vividly on the performance of the largest economies within the SSA region: Angola (-25.9%), Nigeria (- 11.1% I&E rate, -19.0% official rate and -22.9% parallel rate), Kenya (-7.2%) and S/Africa (-4.7%). Clearly, oil exporters were hit harder compared to non-oil commodity exporters as the oil market crash resulted in a severe dollar crisis in Nigeria and Angola. Also, Mauritius' currency fell 8.4% due to the harsh impact of the pandemic on the tourism sector, the country's main source of foreign currency earnings.


Going forward, we expect most local currencies in SSA to remain relatively weak over the course of 2021. Specifically, we expect the South African Rand to remain highly volatile as the currency continues to weaken due to carry trade, coupled with potential bounce-backs arising from the lifting of restrictions in Europe, the US and other economies to which South Africa economy is largely exposed to.


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Looking Forward


Dec-2020 M2 Money Supply YoY-January 10th

Dec-2020 CPI YoY-January 13th



Nov-2020 M3 Money Supply YoY- January 11th



Dec-2020 M3 Money Supply YoY- January 11th


South Africa

Dec-2020 Gross Reserves-January 8Th

Nove-2020 Retail Sales MoM-January 13th

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