A market guide published earlier this year by First Abu Dhabi Bank highlighted the disparate nature of the SSA FX market, which should come as no surprise given the economic differences between the more than 50 countries that make up the region.
So while the Kenyan shilling, the Zambian kwacha and the Ugandan shilling are all free-float currencies, the Zambian and Ugandan central banks are prone to market intervention, and the Ghanaian cedi is actively managed by the country’s central bank.
Both the Mauritian rupee and the Nigerian naira are managed float currencies, but the former has a number of separate exchange-rate windows.
One observation that can be confidently applied across the region is that there has been a shift away from voice channels to a more click-and-deal model for FX trading, prompted by larger African banks using electronic solutions from their offshore liquidity providers in major currencies.
This is the view of Tim Hutchinson, head of global markets digital and ecommerce at Standard Bank, who refers to a number of banks offering some form of electronic execution capability – predominantly through a single-dealer platform – during the past three years.
