Foreign Exchange |

South Africa’s ANC attacks banks over forex rigging charges

JOHANNESBURG (Capital Markets in Africa) – South Africa’s ruling ANC party called on Thursday for the toughest possible sanctions against more than a dozen local and foreign banks accused of rigging the rand currency, piling political pressure on lenders that have become a target for public anger. The Competition Commission said on Wednesday it had found the banks, including U.S., European, Japanese and Australian lenders, had colluded to coordinate their trading activities when dealing in…

Ghana Cedi Falls Second Month as Growth Spurs Dollar Demand

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GHANA, Capital Markets in Africa: Ghana’s cedi is heading for a second straight month of losses against the dollar as acceleration in economic growth boosts demand for dollars to pay for imports. The currency of the world’s second-biggest cocoa producer weakened 3 percent in June after sliding 0.7 percent in May, the first instance of back-to-back monthly losses since November. The cedi fell 1 percent to 3.9550 per dollar by 11:55 a.m. on Thursday in…

South African Bonds Gain Most in Two Months With Rand on S&P

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Johannesburg, South Africa, Capital Markets in Africa: South African bonds gained, driving yields down the most in more than two months, after the country escaped a downgrade that would have left its debt rated so-called junk. Yields on benchmark rand bonds due December 2026 dropped 15 basis points, the most since March 13, to 9.04 percent by 3:23 p.m. in Johannesburg, adding to an 11-point decline on Friday after S&P Global Ratings affirmed South Africa’s…

Mozambique to limit use of Credit/Debit Card Abroad to US$13,600

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MAPUTO, Mozambique, Capital Markets in Africa — The Bank of Mozambique has set an annual limit of 700,000 meticais (about US$13,600) for payments abroad using a credit or debit card issued by a Mozambican bank. The governor of the central bank, Ernesto Gove, had warned on Nov 30 that large sums of money were leaving the country through the unrestrained use of bank cards abroad, and that this type of spending had risen dramatically. The metical…

Nigeria – Will they or won’t they?

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LONDON (Capital Markets in Africa) — In recent weeks, investors in Nigeria have become increasingly perplexed about whether there will be a naira move before the end of 2015. On one hand the NDF market seems to indicate that there will be a move. And the consensus forecast for the value of the naira at the end of 2015 is NGN215:US$1, so in a rare show of unanimity economists seem to agree with the NDF…

What expert says: Nigerian naira overvalued or undervalued?

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Johannesburg, South Africa (Capital Markets in Africa) — The interbank rate was seemingly unmoved at USD/NGN197 in 2Q15, masking the intense backlog of US dollar demand. It is difficult to discern whether domestic liquidity conditions have improved since the election. The MPC’s rhetoric regarding the imbalance in the domestic foreign exchange market continues to favour exchange controls to restrict excess US dollar demand. Partial dollarisation and bouts of speculative activity are believed to have aggravated…

Nigerian currency is overvalued says Africa Economist, John Ashbourne

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LONDON (Capital Markets in Africa) — I would say that the currency remains overvalued. Nigeria’s balance of payments position has changed quite radically since the price of oil fell so sharply, and the currency has yet to fully adjust to this. Given low oil prices, relatively high inflation, and generalised dollar strength we would have expected that the naira would have weakened over the course of the second quarter. Indeed, almost every other SSA currency…

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