Zambia’s kwacha tops world’s worst performing currencies

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African assets tumbled amid the global markets rout on Monday on concern China’s economy is slowing and as commodities fell to a 16-year low.

Half the world’s 20 worst performing currencies as of 3:54 p.m. in London were African, with Zambia’s kwacha falling the most globally and South Africa’s rand reaching a new low against the dollar. Yields on Nigeria’s Eurobonds soared to record highs, while Ghana’s dollar yields rose above 10.5 percent for the first time since December.

“It’s crazy right now,” Stephen Bailey-Smith, head of Africa strategy at Standard Bank Group Ltd., said by phone from London. “Everyone’s putting on a helmet and just hoping to get through the day. African Eurobonds have been hit harder than average because they’re perceived as being more commodity-dependent.”

More than one quarter of sub-Saharan Africa’s exports go to China, according to data compiled by Bloomberg. Beijing’s devaluation of the yuan last week heightened concern that slowing growth will depress prices of commodities from oil to copper, with Brent crude falling below $45 a barrel for the first time since March 2009 on Monday.

Zambia, which derives almost 70 percent of export earnings from copper, saw its currency drop as much as 4.6 percent to 8.58 per dollar before paring losses to trade 3.7 percent weaker at 8.51, still a record low on a closing basis. Copper tumbled 1.7 percent to $4,970 per metric ton, the lowest since July 2009.

Intervention ‘Suicidal’

The southern African nation’s government said it would be futile to try and stop the rout by selling dollars in the currency market.

“You cannot intervene in a currency market or the speculators will take you to the cleaners,” Deputy Finance Minister Christopher Mvunga said by phone from Lusaka. “That’s suicidal if you do that.”

Nigeria and Angola, Africa’s biggest oil producers, may be forced to abandon efforts to sustain their currencies amid the turmoil, according to London-based advisory firm Capital Economics Ltd.

Forward prices for the naira widened even as the spot price, which has been mostly flat since the start of March amid central bank curbs on trading, was unchanged at 199.05 per dollar. Six-month non-deliverable forwards, which indicate traders’ expectations for the interbank price in that period, surged 3.4 percent to 244.5 per dollar, the highest since March 25. One-month forwards surged 2.7 percent, the most since Feb. 10, to 212.5.

The Nigerian central bank’s spokesman, Ibrahim Mu’azu, didn’t answer Bloomberg’s calls to his mobile.

Nobody Spared

Oil importers weren’t spared the rout. Kenya’s shilling depreciated 0.3 percent to 103.7 per dollar, the lowest on a closing basis since ….READ MORE ON bloomberg.com

 

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46 COMMENTS

  1. China has massive production bases unlike Zambia, so when they devalue the yuan, it is to improve the prospects of their exports….what of our mono economy Zambia?

  2. #0% of zambian pipo are very poor to understand some of these simple logics and more than 70% do confine themselves to what they ve and not seeimg what the world has for them. sad.

  3. listen its nt rocket science when u vote a party in2 power u interest them wit the affairs of the nation they set the tone, so if shit hits the fan the buck stops @ their feet… truth of the matter is infrustracture development is all well and good if the money spent remains in Zambia unfortunately when countries like china offer to fund a roads project one of the conditions is that a chinese company shud be the main contractor which means only a fraction of that money comes to Zambia so do the math.

  4. That wont matter to us… Flight hh z ready for depature in 2016.. All boardinq passagers are therefore advised to register as voters and look for their voters card and cast their votes on hh for their tickets to flight hh….

  5. We Zambians have reached dangerous levels as far as promoting our own currency and patriotism . My fear is ,with this level of anti Zambia spirit ,if a foreign country declared war against Zambia ,some Zambian would join the enemy arm against their own country . South African Rand fall to 14 .18 to a dollar just yesterday .the Chinese has devalued their currency and that affect the whole world . Politics is eating up our patriotism in this country for the sake of the elitist of our Zambian society who want to be in power while the elite are banking alot of money every day because they have already invested heavily in the same bad economy . My Problem is how the foreigners are busy and quietly working hard for 24 hours making alot of money in our economy .

  6. Hmmm ati Zambia’s kwacha falling the most globally? See the Russian ruble which is now at 71.085 to $1… that’s the lowest drop as at now. China’s currency dropped to 6.402 a week ago

  7. I blame you zambians for voting idiotically. you alwayz look the tribe and want to vote for someone who has a proven bad track record. if someone is to dress like a clown you will still vote for him. you saw lungus manifesto was the worst and didn’t make sense you still voted for him.

  8. Ubunga bwapwa ati Lungu…iyi. Abakashi baumisha kumbali ati PF….ifyo. Umwana apula ifumo…ati PF kweeeee. Business in China sours ati Lungu. Can Lungu honestly solve the economical problems faced in this global village. Even if it’s opposition be realistic otherwise opposition pa ZED kuwayawayafe!!

    • Laston…China devaluated their currency so that they remain with a viable external reserves…South Africa has seen the weakening of their currency do to xenophobic attacks that has lead to the closure of many businesses…but Zambia…just a drop n copper prices that is not even above 5 percent…can that drigger the fall of the currency like that ayi?.know how the money markets function not to be cheated by these political leaders who wants to defend themselves.

  9. With Zambians they will blame the government. What I’ve learnt in Zambia everthing is political. Some people would blame the government of the day if an earthquake was to come to Zambia opposition and some media houses would say PF has caused an earthquake. Just see on Lake Kariba and loadshading. Some Zambians agree to be cheated even if its a natural disaster I fail to understand DOES IT MEAN WE DONT KNOW POLITICS?.

  10. With Zambians they will blame the government. What I’ve learnt in Zambia everthing is political. Some people would blame the government of the day if an earthquake was to come to Zambia opposition and some media houses would say PF has caused an earthquake. Just see on Lake Kariba and loadshading. Some Zambians agree to be cheated even if its a natural disaster I fail to understand DOES IT MEAN WE DONT KNOW POLITICS?.

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