Browsing: currency depreciation in Africa

• The IMF anticipates a peak in interest rates at the beginning of 2024, following a slower climb in 2023 across major economies.
• This will likely exert pressure on already struggling currencies across Africa.
• Notably, the US Federal Reserve is expected to witness interest rates reaching around 5.4%, with plans for rate cuts in Third Quarter.

Pressure on the weakening local currencies in African economies may persist for much of this year, with further depreciation against major currencies anticipated until the third quarter.

According to the International Monetary Fund (IMF), their latest interest rates forecast update for major economies covering the period from 2024 to 2028 projects a peak in interest rates at the beginning of 2024. This comes after rates continued to climb at a slower pace late last year.

US Federal Reserve interest rate

For instance, the US Federal Reserve is expected to witness interest rates peaking around 5.4 …

Official data has shown that the cost of transacting in international currencies is often 2 or 3 per cent higher than dealing in local alternatives. The higher cost often creates significant international trade obstacles. Ultimately, the progressive decision-making of the Russian government could save Africa from the damaging effects of a strong dollar. Consequently, international trade will become accessible to businesses in Africa. This will boost economic growth in the respective partner countries.…