By ETimes

– Rand eased as it continued to take its cue from swings in global market sentiment

Rand closed the week ending 19 November 2021 lower at 15.62 against the dollar, losing 2% from a rate of 15.32:1 from the previous week. The currency continued to take its cue from swings in global market sentiment, in the week under review, the rand was caught up in emerging market contagion linked to a big Turkish rate cut. However, it was not unmoved by news that rating agencies S&P and Moody’s opted not to release reviews on South African debt on Friday. S&P currently has South Africa’s long-term foreign-currency rating on BB- and the long-term local-currency rating on BB, with a stable outlook, while Moody’s has South African debt at Ba2 with a negative outlook.

– Pula weakens as Botswana plan to mine coal despite COP26’s calls to abandon coal

On Friday the 19th of November 2021, the pula traded at 11.66 against the dollar, 1.6% weaker from the previous week.  Work is due to begin on Botswana’s second privately-owned coal mine despite calls to abandon coal. At the COP26 climate conference in Glasgow, the southern African country signed up to a global commitment to reduce the use of heavily-polluting coal, but opted out of a pledge to stop issuing new licenses to mine the fossil fuel. Botswana is trying to wean its economy off a dependence on diamonds by developing its coal resources which are estimated at 200 billion tonnes.

– Zambian Kwacha marginally fell as the sovereign debt weighs on the economy

Zambia’s total public debt to foreign and local lenders was just shy of $27 billion at the end of June. The figure was equal to about 115% of GDP, according to the latest World Bank figures from 2019. Zambia became Africa’s first COVID-19 pandemic-era sovereign default at the end of last year. Zambia’s foreign debt is spread across diverse regions, with a $6 billion chunk owed to China and the rest owed to various banks, nations and multilateral institutions. As at November 19, 2021, the Zambian Kwacha traded 17.64 against the dollar, which was 0.7% marginally lower than the 17.52 in the week ending 12 November 2021.

– Mozambican Metical flat as the insurgency subsides

For several years since 2017, Mozambique’s Cabo Delgado region has been experiencing an intensifying al-Shabab insurgency. With its explicit allusion to a separate al-Shabab terrorist group in Somalia, Mozambique’s Al-Shabab also embraces global Jihad. Yet local grievances about social and economic exclusion and foreign and elite exploitation of local resources also play a critical role. More than 3,000 people have died in the violence and 800,000 have been displaced.

– Tanzanian Shilling to remain flat as the country embarks on a US$30 Bln gas project

Tanzania, Shell and Equinor have started negotiations on a critical host government agreement (HGA) needed to underpin a $30 billion liquefied natural gas projects. Negotiations begin on host government agreement to underpin gas project, as progress made on Uganda-Tanzania oil pipeline. The pipeline will transport billions of barrels of oil from Uganda to the Tanzanian port of Tanga. If the project is sanctioned in 2022, then it is feasible for the project to come online in 2026, according to its backers.

– The Zimbabwean dollar tumbles as official rate heads towards convergence with the alternative rate

The Zimbabwean dollar traded lower at 105.70 against the dollar on the week ending November 19, 2021 which was 5.8% lower than the 99.93 in the previous week. The alternative market is hovering between 180 – 200 against the dollar. Annual and monthly inflation rates remain high, increasing in October to 54.5% and 6.4%, respectively, up from 51.5 and 4.7 % respectively in September. Prices for most basic goods (including staple maize meal) and services continue to increase, most significantly in ZWL. The other issue is that of the dominance use of the US dollar over local currency. The local currency will remain under pressure on the parallel market, sustaining high inflationary concerns. If they sustain the auction using some of the money from SDR allocations might help in the short run – Harare



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