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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
Ba economist ba pa fb offer solutions
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?
its not only in zambia ba chimbwi go to china today
yaba. no wonder vision is important.
The value of a country’s currency is an expression of CONFIDENCE – or lack thereof. Period.
Oh dear, here we go…
#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.
Henry??????
Any1 against Lungu check ur tribe any1 for lungu check ur tribe!!!!! Meaning?
Ifintu ni lungu this is good government when a tourist give me $10 for a tip that means I have k82 nice one let it reach k10 to a dollar
if its nt this government to blame than who Dr Mumba , or UPND pliz stop looking for excuses and start working now ala
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.
Heavens!!..
South Africa will reduce fuel next month… What about Zambia?
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….
The question z who shud we blame? If nt gvt
Why do you want to compare zambia with other countries?if the kwacha was to gain today….you da same pipo wil praise the president.
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 .
Dnt remove a prank in yo friends eye be4 removing yoz we r saying zambia n sa cause we dnt knw wat sa govnt is doing
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
Are dumb or something?
CHINA RECENTLY DEVALUED AND UNLIKE ZAMBIA, CHINA’S WAS INTENTIONAL TO BOOST EXPORTS AND THE US DID PROTEST.
Meaning?
they never rebased . our true value is k8460 per $. so who is badly hit?
china devalues its currency deliberately..
China rebased and they have failed to hold a fixed rate this time. I live and work in Shanghai the economic center so I know what am talking about. Russia is now at 71.085, is it deliberate too? 119.080 Japanese yen = $1
You guys need knowledge not politics
after reading this.. some educated illiterates will go on to say PF have failed us.. lol zambians are just something else.
Mutale Chewe
😢
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.
Read through all the comments and read yours….
Everythin is political.
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.
This time we are moving with hh and if he fails us,2021 we will be goin with kabimba…
Daliso your are right. We need economists to guide us on such issues but they have all gone political
This is as result of what we call political risk. Anyway ifintu ni Lungu.
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?.
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?.
I wouldnt say its lungu,but pf in general. There strategy wen they just came into power was a total disaster. Wanting to shine on kongole.
👍👍 wise words
Standard procedure in a currency crisis is for government to offload some foreign exchange reserves onto the market. They cannot do this because they have run out of reserves through idiotic policies and general dullness. So Mr. Zimba it is their fault for failing to find a solution. That is why we have entrusted them with the economy, to find solutions.
If things are not going well in a household, who do you blame? Is it not the one heading the household?
U r not daliso but tembelelo do u think this control it self its the govnt of the day to blem