How are African currencies fairing?
The financial crisis had caused significant depreciation of many African currencies against the U.S. Dollar and Euro. This arose from the negative impact of the financial crisis on commodity prices and the consequent decline in export receipts, as well as declining inflows of private capital and remittances. Commodity dependent economies, such as Zambia and Nigeria witnessed sharp drops in the value of their currencies in early 2009 as a result of the sharp decline in export receipts and declining capital inflows, among others. We believe that as long as commodity prices continue to be low, commodity dependent economies will continue to experience currency fluctuations. Aside from weak currencies, we expect many African countries to experience declines in exports due to weak global demand for commodities and a less than proportionate decline in imports, as imports of essential consumer and capital goods cannot be instantaneously reduced in response to declining export receipts. This wi
