African currencies suffer amidst COVID-19 pandemic, forex scarcity - BLUEPRINT

MAY 25, 2020

BY  Segun Odunewu

Several African countries local currency, including Nigeria’s Naira, have not been spared as the spread of the deadly COVID-19 lockdown causes investors to dump riskier assets and the Dollar to surge.

Risk-off sentiment by investors in emerging markets and across African countries in particular as well as the historic downturn in commodity prices, is having a telling impact on currency rates.

Findings by global rating agencies shows that South Africa’s Rand, Nigeria’s Naira, Ghana Cedi, Kenyan Shilling, Tunisian Dinar, Morocco’s Dirham, and the West African Monetary Union’s CFA franc have all fallen to record low as a result of the pandemic.

According to research conducted by United Capital Research, huge capital flow reversal driven by risk-off sentiment, shows that the S/African rand is the worst hit, down by 20.6 per cent Year-to-Date (YTD).

This is followed by the Angolan Kwanza which has depreciated by 16.1 per cent YTD. Mauritius Rupee (-8.8 per cent YTD), Nigerian Naira (-6.6 per cent) and Kenyan Shilling (-5.3 per cent YTD) followed in that order.

Others include the Tunisian Dinar (-3.8 per cent YTD), Morocco’s Dirham (-2.7 per cent YTD) and the West African Monetary Union’s CFA franc (-2.3 per cent YTD).

The Kenyan shilling was one of East Africa’s most stable currencies, until recently. It reached a record low this week and while it’s recovered in the past two days, it’s still down 3.6 per cent this year.


This website uses cookies We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you've provided to them or that they've collected from your use of their services
Real Time Analytics