African Currencies Mostly Flat as Oil Marks Sharpest Weekly Drop Since 2020

African Currencies Mostly Flat as Oil Marks Sharpest Weekly Drop Since 2020

African currencies produced few clear gains as oil prices declined sharply this week, with the South African rand and Botswana pula slipping marginally against the dollar while Angola’s kwanza remained unchanged, according to market data.

The naira held broadly steady against the US dollar, closing the week at N1,346.7945 at the Nigerian Foreign Exchange Market trading window, up from N1,346.2565 at the start of the week.

Brent crude was on track for a 16% weekly decline, its steepest since the onset of the Covid-19 pandemic, after election losses by US President Donald Trump’s Republican Party raised expectations of a de-escalation in the US-Israeli conflict with Iran.

Other assessments placed the drop closer to 13%. Brent settled at $98.32 a barrel on Friday. The Brent benchmark briefly topped $126 in late April, meaning prices remain far above pre-war levels.

Tanker attacks near the Strait of Hormuz continued to support oil prices. The slide in crude also came against the backdrop of a technology stock sell-off.

Rand: USD/ZAR rose 0.33% to 16.53, indicating a slightly weaker rand. That places it in the middle of the 16.3–16.7 range of recent months. The rand was on track for a nearly 8% decline in March as the Iran war pushed investors toward the dollar.

The South African Reserve Bank held rates at 6.75% in March but said the war was clouding its inflation outlook. Lower oil prices could ease that pressure for an oil importer such as South Africa, though the rand’s latest move suggests global risk appetite was outweighing that benefit.

Kwanza: USD/AOA was unchanged at 912.80. Oil-dependent Angola manages its currency, so a flat quote may reflect a reference rate rather than free trading. Sustained lower crude prices would add pressure on the kwanza.

Burundian franc: USD/BIF edged up 0.01% to 2,990, an official rate that analysts say understates the currency’s weakness. The IMF said the official rate remained significantly overvalued, with a gap of around 100% to the parallel market at the end of April, even after stronger coffee and gold earnings.

Pula: USD/BWP rose 0.67% to 13.42. Botswana runs a crawling peg, with the pula managed against a basket that includes the South African rand, so it tends to follow the rand. Its larger move this week may reflect the peg’s mechanics or a thin quote.

Analysts caution that the managed currencies’ small moves reflect policy as much as market sentiment.

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