Debt relief, Nigeria’s exchange rates

Debt relief proposals for low-income African economies that would include commercial creditors are taking shape, although our sense is that restructurings are most likely to be relatively modest and on a case by case basis. In Nigeria, there are reasons to be sceptical that hopes of a switch to a unified, flexible exchange rate regime will materialise.
William Jackson Chief Emerging Markets Economist
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Africa Data Response

South Africa Consumer Prices (Sep.)

Although South Africa’s headline inflation rate picked up to 5.0% y/y in September, soft underlying price pressures and a fragile economic recovery mean that policymakers will only normalise monetary policy gradually. By contrast, investors currently appear to expect a relatively aggressive tightening cycle.

20 October 2021

Africa Economics Weekly

FX orthodoxy in Nigeria? Strikes in SA, Ethiopia’s conflict

Comments by Nigeria’s vice president endorsing a more market-based exchange rate regime reflect growing concern about the distortionary effects of the current FX system, but there is no evidence that key officials backing the existing currency arrangements are also shifting tack. In South Africa, ongoing industrial action in the steel industry will probably dampen manufacturing output in Q4, in another hit to the recovery in the sector and the wider economy. Finally, escalating tensions in Ethiopia raise the spectre of more severe strains in the balance of payments.

15 October 2021

Africa Data Response

Nigeria Consumer Prices (Sep.)

The drop in the headline inflation rate in Nigeria, to 16.6% y/y in September, will ease pressure on the central bank to raise rates and allow policymakers to focus on supporting the economic recovery.

15 October 2021

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Latin America Data Response

Brazil Industrial Production (Apr.)

The worse-than-expected 1.3% m/m decline in Brazilian industrial production in April is likely to be followed by a partial recovery last month. That said, the latest surveys suggest that activity in the industrial sector hasn’t picked up to the same extent as other parts of the economy.

2 June 2021

Latin America Data Response

Brazil GDP (Q1 2021)

The 1.2% q/q expansion in Brazil’s GDP suggests that the economy held up well during the country’s second virus wave and more timely figures point to a rapid recovery from the more recent third wave. These figures will keep the central bank on track to hike the Selic rate by a further 75bp (to 4.25%) when it meets in June and it looks increasingly likely that it will flag another 75bp hike in August too.

1 June 2021

Emerging Markets Trade Monitor

A closer look at the EM export boom

EM exports are set to hit a new high in Q2, which will help to support economic growth, particularly in East Asia where virus cases are hitting domestic economies. While EM exports are likely to come off their current highs, they will probably stay at elevated levels throughout the rest of the year.

27 May 2021
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