Browsing: foreign exchange

Currencies are plummeting, with increased import prices exacerbating economic and inflationary pressures for Africa, the end result being a currency crisis.

  • A currency crisis occurs when the value of a country’s currency falls drastically.
  • The euro’s decline directly impacts the 14 African nations that use the CFA franc, linked to the European single currency.
  • Most African nations lack a robust commodities export base making them vulnerable to economic shocks.

Understanding what a currency crisis means

A currency crisis occurs when the value of a country’s currency falls drastically. This loss in value, in turn, negatively impacts an economy by causing instability in exchange rates. This means that one currency unit no longer buys the same amount as another.

This crisis can be both foreseen and unexpected. It might be caused by governments, investors, central banks, or any combination of these parties. However, the end outcome is always the same: A …

In a bid to combat inflation, central banks must evaluate the advantages against the possible adverse effects on their transparency and credibility, particularly in situations where monetary and fiscal policy frameworks are not firmly established.

  • Monetary and fiscal policy are two powerful tools that governments use to steer economies.
  • Public debt ratios have peaked at their highest levels in more than two decades, and several low-income African nations are in or near economic shutdown.
  • Experts have projected that total inflation in sub-Saharan Africa will reach 12.2 per cent in 2022.

Understanding monetary and fiscal policy

Monetary and fiscal policy are two powerful tools that governments use to steer economies. When applied correctly, these tools can similarly stimulate an economy and slow it down when it heats up.

Fiscal policy is when a government uses its spending and taxing powers to impact the economy. Monetary policy relates to the techniques a …

  • Reserve Bank of Zimbabwe has made it mandatory for exporting companies to settle a portion of their power bills in hard currency
  • Exporters in Zimbabwe are already inundated with operating costs in hard currency while charging local currency prices for their goods and services
  • Reserve Bank of Zimbabwe has through this regulation entrenched the use of hard currency in the Zimbabwean Zimbabwe

The Reserve Bank of Zimbabwe has directed that all exporters and partial exporter settle their bills to the power utility the Zimbabwe Electricity Supply Authority (ZESA) in hard currency namely in United States dollars and other currencies.

This latest policy pronouncement was made on the 13 of July through Statutory Instrument 131 of 2022. The policy pronouncement mandates the national power utility to collect bills from so-called exporters in hard currency for the next six months.

ZESA the power utility has been making impassioned pleas for the …

  • Tanzania managed to attract Foreign Direct Investments (FDIs) totaling 2.9 billion US Dollars in five months between March and August.
  • Tanzania’s total foreign reserves reached a historical high, sailing well above the regional benchmarks.
  • The central bank attributed the reserve increase to exports of goods and services that increased by 6,1 percent.

During the tumultuous period, of Covid-19 Tanzania’s economy largely operated under the premise of business as usual. Despite this approach, the country was less confronted with an unavoidable slowdown in some of its key sectors but not all may be tourism got its fair share of the effect of Covid-19, which resulted to the slowdowns in the economies of its key trading partners.

In May 2020, when many countries in the region were starting to realize the full extent of the short- to mid-term economic crisis associated with Covid-19, the Monetary Policy Committee of the Bank of Tanzania …

Forex Market is a global financial market where currencies are traded and exchanged. Retail investors can participate in this market for the purpose of speculation or hedging.

Trading in the forex market is especially popular in Africa, and the market is regulated by CMA in Kenya. Lower barriers to entry for investors, and entry of more regulated players in the industry has led to growth in CFD trading & forex trading in Kenya.

The Covid-19 pandemic has led to a huge surge in the trading volume in Africa. But most retail investors are unaware of the risks associated with CFD & forex trading, and this puts them at risk of losing their capital or even more.

We look at the state of local online forex trading industry since it has been regulated and the risks that online forex trading pose to retail investors.

Growth and Concerns

Kenya based broker comparison …

On October 12th, Law no. 35/20 – the Free Trade Zones Law (“FTZL”) – was passed. The FTZL has established benefits to be conceded to investors by the Angolan Government, aiming at attracting foreign investment in Angola thus creating economic growth.

All types of investment are permitted in the Free Zones, specifically investment in agriculture, industry (that use Angolan raw materials and are focused on exportation) and technology. Specific aspects pertaining the access to Free Zones (such as monetary requirements, number of jobs created, investments in fixed assets) shall be determined in the investment contract.

Access to the Free Zones is permitted to companies, joint ventures, groups of companies or any other form of companies’ representation, whose scope meets the purpose of the Free Zones.

The investments made in Free Zones must take into account environmental protection interests.

Activities to be developed in the Free Zones
In the Free Zones …

The impact technology has on our world is profound and, some might say, immeasurable. Outside our personal lives, it continues to change industries and global markets at a rapid pace every single day. Foreign exchange, or forex, is one of those financial institutions that are evolving with groundbreaking advancements. But before we can fully appreciate the effects of disruptive technology on forex today and possibly the future, we have to look at how it began.

How Forex Was Traded in the Past

Trading forex is as old as the history of civilizations. In ancient times, people exchanged goods and services for a price, even if that price was represented by raw materials or food. The problem was assigning value fairly — people disagreed on whether or not the items being bartered were equal to each other. To solve this, Thought Co. points out that early civilizations developed commodity money and …