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 to 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
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
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
Also, weak economic structure in some countries and regulatory
uncertainties in others remains a headwind to currency performance in 2020.
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