Browsing: currency crisis

Currency depreciation in Africa

The Kwacha is the official currency of Zambia. The country's foreign exchange rate remained unsettled for a very long time. However, Zambia has made substantial steps in recent years to strengthen its currency through economic measures and foreign support.

Zambia has set an example for other African nations by efficiently controlling its currency. While facing numerous economic issues, such as a drop in copper prices and a large debt, the Kwacha exchange rate has remained reasonably constant.…

Subscribe to unlock this article

Login to read this article for free and get 3 free premium articles. Subscribe today for unlimited premium articles and more.

Digital Subscription – Monthly

Monthly renewing
You can cancel anytime.

$5 /Monthly

Digital Subscription

Rising in Africa

Some worry that monetary policy is still excessively accommodating, given that rate hikes have not matched inflation. Policy cooperation may be beneficial. Fiscal consolidation and a mix of rate rises and currency depreciation may play a role in nations where policy is overly permissive.

The shaky recovery in Sub-Saharan Africa, coupled with domestic demand constraints, has not significantly fueled inflation so far. However, in the coming months, governments and policymakers must carefully monitor and prioritise tackling the rising inflation in Africa.…

A currency crisis occurs when the value of a country’s currency falls drastically. www.theexchange.africa

A currency crisis is defined as a quick and abrupt depreciation of a country’s currency. Currency depreciation goes in tandem with turbulent markets and a loss of confidence in the country’s economy. Historically, crises have arisen when market expectations induce significant movements in the value of currencies.

The global economy is now in turmoil. As the world economy enters another era of a currency crisis, the value of the US dollar keeps rising. Over half of all international trade is billed in dollars. A stronger dollar thus hurts consumers globally, particularly in Africa, who rely on dollars to pay for imports.

The US Federal Reserve’s hawkish approach to increasing interest rates more aggressively than central banks in other major countries has contributed to the dollar’s appreciation. The fact that investors generally see the dollar as a “safe haven” asset during times of economic turmoil has added to its resilience.…