IMF rapid financing brings Naira relief
Increased CBN dollar supply and the IMF’s $3.4 billion emergency support under the Rapid Financing Instrument (RFI) halted the Naira’s slide. 12-month Naira forward rates pointed to 509 and the currency had weakened to a 3-year low of 460 per dollar in the parallel market, before reprieve to 450 by week’s end. Dollar liquidity eased with the CBN lifting a 14-day suspension on Bureau de Change dollar sales (partly to allow parents to pay offshore school fees and SMEs to meet essential import bills). A narrowing of the gap between the parallel and official rates will help Nigeria address the IMF calls for unification of exchange rates to curtail price arbitrage. We foresee further relief for the Naira in the coming days.

Rare cheer for Rand won’t last
An easing in South Africa’s lockdown, one of the world’s strictest, and a $26.9 billion stimulus package to revamp the economy gave investors some cheer, bringing the Rand back from 19.03 per dollar levels to 18.50 by the end of the week. The reprieve is unlikely to last, with a return to 18.70 levels likely in the coming days. S&P downgraded the nation's credit rating further into junk, citing structural economic weaknesses and fiscal challenges.

Shilling withstands pressure after rate cut
The Kenyan Shilling withstood reduction in interest rates to a 9-year low of 7% in a bid to protect the economy from coronavirus impact. The Shilling edged only slightly weaker to 107.25 from 107.10. The World Bank projected output would shrink by 1% if disruptions from the pandemic continue for a further three months. The central bank cut its economic growth forecast to 2.3% from 5.4% predicted in 2019. Relief will come from the IMF’s Special Drawing Rights $700 million facility starting mid-May. We see stability around current levels in the near term.