Rwanda bond sale signals demand for Africa credit
International investor demand for African credit was on display this week as Rwanda raised $620m in 10-year bonds at a yield of 5.5%. The proceeds of the bond will be partially be used to refinance Rwanda’s existing Eurobond due in 2023 as well as funding priority projects to support economic recovery.

Naira recovers after CBN guidelines on BDCs
The Naira appreciated in the parallel market, trading at 508 to the dollar compared to 525 at the close of last week. Market panic after the CBN issued guidelines banning sale of dollars to Bureau de Change’s has reversed, with most speculators cutting their negative positions, reversing losses on the currency. The restrictions are a relief to some who accuse the BDCs of hoarding dollars and creating artificial shortages, with the CBN effectively directing banks to make more foreign currency available. The Naira maintained 411.5 to the dollar in official rates during the week. With panic buying off, we project the naira to further strengthen in the coming days. 

Cedi under pressure amid Accra street protests
Ghana’s Cedi traded at a low of 6 to the dollar this week compared to 5.98 at the close of last week amid a lack of liquidity in the market. Protestors were out in the streets of Accra demanding for the government address economic challenges facing the country and become more accountable. In line with this, we project sustained pressure on the local currency in the coming days.

Rising commodity prices support Rand
The Rand appreciated to 14.34 during this week’s trading compared to 14.56 at the end of last week, supported by a boost in commodity prices and a weaker dollar. The government announced relief measures which include reinstating a monthly welfare grant of 350 rand for the poor until the end of March next year as well as support for uninsured businesses to help them against the effects of a sluggish economy. We project sustained levels in the coming days if not further gains for the Rand.

IMF support and reserves to steady Kenya Shilling 
The shilling traded at levels of 108.60/108.80, a slight drop from last week as demand for foreign currencies from importers increases. Importers are responding to fears of stiffer Covid-19 restrictions by the government given recent increases in infections. To support the economy, the International Monetary Fund relaxed its stringent lending policies, opening the door for Kenya to take more loans to aid the fight against the Covid-19 pandemic. We expect the Shilling to stay stable with the support of foreign exchange reserves, which remain adequate at $9.34 billion as of July 29th.

Uganda ending 42-day lockdown keeps Shilling stable
The Shilling climbed slightly to 3,541/3,551 from 3,547/ 3,557 last week. President Yoweri Museveni on Friday eased some of the stay-at-home restrictions after a 42-day lockdown. The country has continued to register a drop in Covid-19 cases while the government administers vaccines. We expect the Shilling to remain stable in the coming week amid rising importer demand for dollars as the economy reopens.

Tourism in recovery in Tanzania
The Shilling traded at levels of 2,314/2,324, unchanged from last week. With the government’s   administration of Covid vaccines to some groups in the country, revenue from tourism is expected to rise. The World Bank projects that the tourism sector will support recovery, estimating GDP growth between 3.5% and 5.5%. Tanzania’s leading source of foreign exchange, tourism earnings have declined significantly amidst the pandemic. We expect the Shilling to remain steady in the coming days as inflows from the tourism sector and also from exports of agriculture products balance export-led foreign currency outflows.

Egypt reserves pickup helps Pound
The Egyptian pound is trading at stable  levels of 15.65 / 15.75, supported by an increase in net foreign reserves at the Central Bank of Egypt of approximately $20 million in July to $40.6 billion. Egypt and Japan signed an agreement to increase the Japan International Cooperation Agency (JICA) grant to  $19 million. The aim is to promote the development of the health sector in the country. We expect a stable Pound in the coming week.