Stears analyses African Foreign Exchange Markets using new FX Monitor

As the global economy grapples with the aftermath of the pandemic and geopolitical tensions, Africa's foreign exchange markets have been in flux. This tumultuous environment poses significant challenges for capital allocators and decision-makers interested in the African continent. Leveraging the Africa FX Monitor's extensive data and analytical capabilities, we delve into the intricacies of these markets to offer an insightful view.

Historical volatility: A closer look at Nigeria, Kenya, and South Africa

The USD:NGN rate has seen a significant depreciation, currently standing at 980 (at the parallel market), representing a 28% divergence from the official (I&E) rate of 768 despite significant FX market reforms.

In contrast, the USD:KES rate, currently at 147.2, reflects a more stable macroeconomic environment in Kenya, albeit with some downward pressure owing to ballooning public debts, import shortages and a steep decline in fiscal revenues due to severe drought.

The USD:ZAR rate, at 18.9, has seen an upward trajectory owing to the South African Reserve Bank's proactive