VenturesNow

Best-to-Worst: Zambian currency hits record low

Published

8 months ago

May 9, 2024

A shortage of hard cash and a severe drought that has caused power outages in copper-producing Zambia have made its currency, the kwacha, fall to a record low against the US dollar as of Wednesday, reaching 27.30 to the dollar.

Based on LSEG data, the value of the kwacha relative to the US dollar has decreased by over 5% this year and 17% in the last six months. The previous low, on February 6, was 27.23.

The latest profile of the Kwacha is an anti-climax from an earlier position this year, in February, following consistent drastic monetary policy interventions by its central bank, Zambia’s currency became Africa’s best-performing currency against the US dollar.

This year, the US dollar index, which measures the value of the dollar relative to a basket of currencies, has increased by 4% to 105.58. However, the MSCI International Emerging Market Currency Index, which opens in a new tab, has only declined by 1%, indicating that the kwacha is not keeping up with the currencies of larger emerging nations.

The southern African country went into default in 2020 due to the COVID-19 pandemic. Its attempts to restructure its debt have been plagued by delays, but in March they made progress when the government and a group of bondholders agreed in principle.

“There is too much demand for dollars, mainly to meet imports of petroleum products and we have very scanty supply. It appears we are heading towards 30 per dollar,” a trader at a commercial bank in Zambia said.

Global monetary tightening cycle caused serious problems for African currencies in 2023. The official currency rates for the Nigerian naira, Kenyan shilling, and South African rand saw considerable swings in December 2023, with an average decline of 27% from 25% in November.

VenturesNow

Moroccan annual inflation rises to 0.8% in November

Published

2 days ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

3 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”