Currencies in Africa: South African Rand Leads Laggards


Friday, June 19, 2020 / 1:23 PM / United Capital Research / Header Image Credit: Bloomberg


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Monetary Policy in Africa: Shooting for growth In the wake of the COVID-19 pandemic, global monetary policy authorities have launched several expansionary programs, to cushion the virus' negative economic effect on growth. African economies were no different, as the pandemic posed a threat to decades of economic growth, which was formerly buoyed by capital inflows, favourable commodity prices and large aggregate demand.


Notably, the massive flood of monetary stimulus in developed markets created room for African economies to trim policy rates, amid the implication on foreign fund flows. This included notable regional economic giants; Egypt (-300bps), South Africa (-275bps), Ghana (- 150bps), Kenya (-150bps) and Nigeria (-100bps). Also, the Central Bank of Egypt approved an EGP100.0bn package, to cover lending at preferential rates to the manufacturing, agriculture, and contracting loans. Similarly, the Central Bank of Nigeria launched a N1.1tn intervention fund to the manufacturing and healthcare sectors. Elsewhere, the Central Bank of Kenya lowered banks' cash reserve ratio by 100 bps to 4.25%.


For the rest of the year, the current expansionary stance of African monetary authorities is unlikely to change. As a result, we expect policy decisions to be focused on guiding economies into recovery, as different countries lift restrictions and lockdowns placed due to the pandemic.


Top African Stories 

  • S.Africa's bad debts may hit highest ever level of 10% due to virus: South Africa's bad debts could hit 10% of bank lending this year according to itsbanking association director, which would be the highest ever and well above the 6% seen during the 2008/9 financial crisis. Read more

  • West African ministers propose phased re-opening of borders: West African government ministers have proposed re-opening borders between their countries in the first half of July and allowing in travellers from other countries with low or controlled levels of coronavirus spread by the end of July. Read more

  • Zambia mining revenues drop 30% due to COVID-19, Chamber of Mines says: Mining companies in Zambia, Africa's No.2 copper producer, have suffered a 30% drop in revenue over the three months to April due to the COVID-19 pandemic and the fallout could last for at least 12 months, the Chamber of Mines said on Thursday. Read more

  • Madagascar offers $73 mln of loans to help small businesses through pandemic: Madagascar has announced a stimulus package offering close to a million small businesses secure loans at below market rates to help weather the impact of the coronavirus outbreak, Read more

  • China will exempt some African countries from repaying certain loans: China will exempt some African countries from repaying zero-interest rate loans due at the end of 2020, state television reported on Wednesday, quoting President Xi Jinping's speech at a summit. Read more

  • Egypt secures financing from AfDB to continue its solar growth ambition: Thirty international infrastructure developers got behind this project, investing in Egypt's massive Benban solar park, which will be the largest in the world upon completion. Read more


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May-2020 Net Reserves - June 22th



Q1-2020 GDP Constant QoQ - June 29th

June-2020 Net Reserves - July 7th



May-2020 M2 Money supply YoY - June 26th

Jun-2020 Markit/Stanbic Bank PMI - July 6th



Jun-2020 Benchmark Interest Rate - June 25th

Q1-2020 GDP YoY - June 30th



May-2020 CPI YoY - June 22nd

Q1-2020 GDP Report - June 21st



May-2020 Private Sector Credit YoY - June 29th

May-2020 Current Account Balance - June 20th


South Africa

Apr-2020 CPI YoY - June 24th

Q1-2020 GDP YoY- June 30th 


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