Recent trends have indicated an upwards shooting of the US Dollar against African currencies, and that has greatly affected the economies of countries in the continent.
Sierra Leone, like majority of other African Countries that use Dollar to pay for imports, its currency, the Leone has been drastically depreciating against the dollar, and that has severely battered the country’s economy. The costs of goods and services have sharply increased as a result of the devaluation of the Leone against the Dollar.
Over the past months, the Leone has been on a free fall against the Dollar. The exchange rate of the Leones to Dollar increased 290.0000 or 1.94% to 15,295.00 on Saturday 24 September 2022 from 14,917.0000 in the previous trading session, and a change of 36.25% from a year ago when the exchange was 10253.1416 Leones per USD.
Meanwhile, the worst hit currency on the continent is the Ghanaian Cedi, which has lost 40% of its value against the dollar so far in 2022, according to data on indicative rates supplied by Refinitiv.
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The South African Rand is another major currency under pressure amid faltering investor confidence. The rand has been on a declining trend against the US dollar for several years and has depreciated by 9% so far in 2022.
“African countries that lack a strong commodity export base are in an exposed position. The Kenyan Shilling, for example, has seen its indicative value decline by 6% so far this year,” according to African Business.
Nigeria’s complicated system of multiple exchange rates makes it difficult for businesses and individuals to access dollars, particularly in times of economic stress.
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“Of all Africa’s major currencies, only the Zambian Kwacha has had a good year against the dollar, gaining 6% so far in 2022. For African policymakers seeking to manage currency risks, there is no easy way out of the cycle of crisis,” African Business stated.
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