As other Sub-Saharan currencies continue to receive a beating from the US Dollar, the Zambian Kwacha has continued to shine, being the only currency in Sub-Saharan Africa that appreciated against the dollar.
A report by Cytonn shows that the Zambian kwacha was the only currency that appreciated against the US Dollar, gaining by 5.9 percent year to date.
The appreciation of the Kwacha was mainly attributable to positive investor confidence following Zambia’s improved macroeconomic performance and strong trade surplus driven by higher copper price earnings.
The Kenya Shilling depreciated by 6.7 percent in Q3’2022 to close at 120.7 shillings against the US Dollar, compared to 113.2 shillings recorded at the beginning of the year.
In Q3’2022, most of the selected Sub-Saharan currencies continued to depreciate against the US Dollar, mainly due to the increased inflationary pressures in the majority of the countries on the back of persistent supply chain constraints.
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The Ghanaian Cedi was the largest decliner YTD and over the last twelve months, losing 66.1 percent and 67.8 percent, respectively.
The dismal performance of the Ghanaian currency was mainly a result of a deteriorated macroeconomic environment, characterized by high inflation which stood at 33.9 percent in August 2022, against the Ghana Central Bank target rate of 6.0 – 10.0 percent.
Ghana also continues to face debt sustainability concerns with the public debt to GDP ratio coming in at 84.6 percent as of July 2022, coupled with a downgrade of Ghana’s credit outlook ratings by both Moody and Fitch to negative.
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