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Sub-Saharan African Currencies are on a Downward Spiral against the USD this Year

Interest rate hikes in the US — which is driving away investors in pursuit of higher returns toward US assets — and weak demand for African exports amid global recession worries have been dragging down African currencies. Local citizens are decrying higher prices of imported goods leading to high costs of living while importers are complaining about their inability to source enough goods due to the decline in the value of their local currencies. When currencies weaken against the greenback, imports become expensive as they are mostly denominated in US dollars. Different governments have taken different measures to prop up their currencies. Some governments have resorted to implementing tighter monetary policies, including hiking interest rates. Many central banks have also tried to boost their currencies by pumping in dollars from their reserves in the local foreign exchange market, but with their reserves depleting fast, they are left with limited options.