Emerging Markets In-Focus: Kenya & South Africa
South Africa The Reserve Bank (SARB) cut interest rates yesterday for the fifth time this year | The divided committee voted 3-2 in favour of cutting the main lending rate by 25bps to a record low of 3.5% in an effort to support the ailing economy | The central bank also released a worse-than-previously-predicted GDP forecast of a 7.3% contraction now predicted for 2020 | President Cyril Ramaphosa announced the closure of public schools for four weeks as confirmed cases in the country top 400,000
Kenya The Kenyan central bank is supporting the shilling as dollar demand from increased business activity puts the currency under pressure | It is worth noting that historically, when some central banks have supported currencies - against the market in this way - it has turned out to be very expensive; and the central banks | The most famous case of this type is Black Wednesday in 1992 when George Soros, a currency speculator made a USD1bn by taking currency positions against the Bank of England
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None of the information in this article is, nor should be construed as financial advice. All foreign exchange transactions involve risk and you should always seek your own independent financial advice before entering into any foreign exchange transaction.