31st January 2024
Naira Plunges
Nigeria's naira reaches a historic low of 1,413 against the dollar following the Central Bank's revision of the exchange rate methodology. This marks the second devaluation in seven months, as the bank accuses traders of manipulating rates. The move aims to address fluctuations and challenges in the foreign exchange market, reflecting ongoing efforts to stabilize the currency amidst liquidity issues and external pressures. Analysts suggest the adjustment brings the official rate closer to the parallel market, emphasizing the need for transparency and market accuracy.
Zimbabwe Dollar Plummets
Zimbabwe's currency hits a record low, surpassing 10,160 ZWL per USD, highlighting the nation's economic struggles. The Zimbabwean dollar has depreciated nearly 40% against the US dollar in 2024, making it the world's worst-performing currency. The parallel market rate exceeds official figures, reaching Z$12,000 to Z$14,000. Hyperinflation memories resurface as everyday transactions become complicated. Delta Corp Ltd. shifts to reporting in USD, and IH Securities predicts another year of "severe devaluation." While banks adjust transaction limits, concerns persist over stabilizing the currency and addressing inflation.
IMF Cuts SA Growth
The International Monetary Fund (IMF) has revised down South Africa's economic growth forecast to 1% for this year, attributing the slowdown to logistical challenges affecting the energy sector and transportation. The IMF highlights the need to address disruptions in South Africa's logistics, including ports and freight, as a crucial aspect for recovery. The country's ongoing power cuts and infrastructure issues have hindered economic activity. Additionally, the IMF urges fiscal consolidation, emphasizing the importance of controlling public spending and increasing tax revenues. South Africa's 2025 growth forecast was also revised down from 1.6% to 1.3%.
Sawiris Urges Swift Devaluation
Billionaire Naguib Sawiris criticizes Egypt's delay in devaluing the pound, urging authorities to match the black market rate to resolve the chronic foreign-currency shortage. The pound has recently plunged to 68-70 per dollar on the parallel market, over 50% weaker than the official rate. Sawiris suggests starting with the black market rate, gradually aligning it with the official rate to encourage dollar transactions through official channels. Most analysts anticipate Egypt's fourth devaluation in Q1 2024, but Sawiris emphasizes the need for decisive action to tackle the economic crisis.
