VenturesNow

Zambian, Kenyan, Ugandan currencies to gain stability, but fate of Nigeria’s Naira remains shaky— Report

Published

3 months ago

September 12, 2024

A recent survey by Reuters has suggested that the Zambian, Kenyan, Ugandan, and Ghanaian currencies might all be edging towards stability in the coming weeks, while Nigeria’s Naira is expected to fall.

According to currency traders sampled in the study, Kenya’s shilling is expected to be little changed in the coming weeks, extending a recent period of stability that has lasted about a month.

The local unit gained significant traction in the first part of the year as worries over the East African nation’s potential default on a $2 billion Eurobond that matured in June subsided, but it began to wane in April.

“We’re stuck within this range,” one trader said. “The shilling has reached a stable zone,” a trader said regarding the Kenyan currency.

Due to the persistent support from the central bank and the lack of demand for foreign currencies, the cedi is trading very steadily in Ghana. As of last week, the cedi was trading at 15.65 to the dollar, down from 15.62 according to LSEG statistics.

“The cedi traded relatively stable against the dollar in the past week, with very little interbank activity. Corporate demand has also decreased in the last few sessions,” said Sedem Dornoo, a senior trader at Absa Bank Ghana.

“We expect the pair to remain relatively stable in the coming week,” he added.

Underpinned by a weak demand for dollars as most businesses save their local currency for mid-month tax payments, Uganda’s shilling is also trading in a narrow range in the coming days. The shilling decreased from last Thursday’s closing of 3,716/3,726 to 3,715/3,725 to the dollar, according to commercial banks’ quotes.

But the story is not so pleasant with Nigeria, as traders predicts that the Naira could lose ground due to rising foreign-currency demand, despite the country raising $900 million from a domestic dollar bond sale.

“The dollar raise in itself does not translate to an appreciation, until the central bank puts out those dollars to the market,” one trader said, adding: “Demand is overpowering supply”.

The African Development Bank claims that structural transformation in the continent has been uneven and gradual despite strong economic performance and remarkable resilience. To address this, it will be necessary to call for significant changes to the global financial architecture in order to meet Africa’s development financing needs.

Related Topics:Featured Kenya Naira Nigeria Uganda Zambia

Click to comment

VenturesNow

Moroccan annual inflation rises to 0.8% in November

Published

3 hours 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.

VenturesNow

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

Published

1 day 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.”