Oil Prices Dip on China's Trade Slump, Kenyan Shilling Falls, Nigerian Banks Seek Aid, Ghana Extends Bond Deadline, Zambia Seeks World Bank Debt Help
Oil prices fell by 1% on Tuesday after data showed China's imports and exports fell much more than expected in July in yet another sign of a sluggish post-COVID rebound for the world's largest oil importer. Brent crude futures were down 93 cents, or about 1.1%, at $84.41 a barrel at 0815 GMT. U.S. West Texas Intermediate crude was down 88 cents, or about 1.1%, at $81.06.
KENYA: Imports Surge as Currency Value Halves in 50 Months
The Kenyan shilling has experienced a staggering devaluation, plummeting nearly 50% against the US dollar in under four years, marking one of the most expensive declines in history. As a result, consumers are grappling with soaring prices of imported goods. In Nairobi, various commercial banks are already pricing US dollars above Sh150, intensifying pressure on the struggling shilling and forewarning consumers of impending price hikes on commodities like electronics, cars, and fertilizers. While the Central Bank of Kenya reports an average exchange rate of Sh142.98, the actual trading rate quoted by forex dealers starkly contradicts this, exacerbating the nation's economic turmoil.
NIGERIA: Nigerian Banks Seek Central Bank Cash Amid Liquidity Strain
Amidst signs of liquidity pressure, Nigerian banks are increasingly turning to the Central Bank of Nigeria (CBN) for cash assistance. Although a few major banks maintain reasonable liquidity levels, the broader money market feels the pinch of reduced cash supply, impacting recent transactions involving treasury instruments. Notably, banks' borrowing from the CBN surged by a notable 107% MoM, reaching N755.64 billion in July. While the CBN offers lending and deposit facilities to banks, data reveals a substantial 25% MoM rise in the industry's Standing Deposit Facility holdings, climbing to N783.66 billion in July from June's N625.66 billion.
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GHANA: Government Extends Domestic Dollar Bonds Exchange Period
The government has prolonged the deadline for domestic dollar bonds exchange to August 18, 2023, shifting it from the initial date of August 4, 2023. With a goal to exchange around $809 million, this extension is a response to eligible holders' feedback, allowing more time for internal approvals. The Ministry of Finance's statement outlines that the announcement date will be around August 21, 2023, and settlement is expected on August 25, 2023, or as soon as feasible. The COCOBOD also extended its debt exchange offer period to August 18, 2023, urging participants to submit applications by 4pm on that day.
ZAMBIA: Zambian President Seeks World Bank's Aid in Debt Restructuring
President Hakainde Hichilema of Zambia has appealed to the World Bank Group for assistance in finalizing debt restructuring talks with private creditors. Acknowledging the challenges posed by the negotiation process on citizens, President Hichilema aims for a swift resolution to showcase benefits and their positive impact on ordinary citizens. During a meeting with World Bank officials, he expressed gratitude for the institution's support during Zambia's debt restructuring efforts. President Hichilema expects the World Bank's continued support to help his government achieve its economic transformation agenda. Newly appointed World Bank Country Manager for Zambia, Achim Fock, comes with a wealth of 25 years of experience.