Tag Archives: volatility
volatility: Latest News
Kurt Davis Jr., 8:02 am AFKI Original
The economies of sub-Saharan Africa have felt the pain of 2015 and 2016, and African currencies have experienced volatility as a result. The year 2017 has been a partial year of recovery or adjustment, but there remain a selection of African economies that continue to experience issues with their currencies as a reflection of the problems that are affecting them at home. Here we take a look at four prime examples.
Dana Sanchez, 11:31 am
Traders in East Africa have to convert local currencies to the U.S. dollar before making transactions, then convert the currency back to their national currency. In the process, they pay exchange-related costs at least twice at a time when African economies are struggling with U.S. dollar shortages. About 43 percent of Africans are involved in some form of informal cross-border trade, with women representing the lion’s share – around 75 percent.
Staff, 12:01 am
The size of an economy has no role in the tradeability of its currency. Recent volatility in South African politics can’t be blamed on the fact that the rand punches above its weight in the foreign exchange market. There are a number of countries with big economies whose currencies are traded very little. This is because they don’t have a well-developed financial market. South Africa’s BRICS partners Brazil and India have much bigger economies than South Africa, but their foreign exchange markets are smaller.
Dana Sanchez, 6:36 pm
In 2015, capital raised in U.S. dollars decreased by 11% for IPOs by companies on the JSE compared to 2014, largely due to the weaker rand. The rand value of IPO capital raised on the JSE increased by 11% over 2014. “2016 will be pivotal as companies will be looking to reassess their strategies, which may include divesting of non-core businesses,” a PwC manager said. “Until relative certainty returns to the currency markets, the popularity of U.S. dollar-denominated bonds is likely to taper.”
Anna B. Wroblewska, 1:24 am AFKI Original
Volatility in African agriculture prices is practically a given. “Ninety-six percent of the crops in Africa are rain-dependent — so you get no rains at all, you get no crop,” says Edward George head of group research at Ecobank. In good years, then, prices drop, and in bad years they surge.
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