Investors are awaiting evidence that Zambia’s efforts to shore up its currency will succeed as the government starts marketing a Eurobond, sub-Saharan Africa’s first sovereign international debt sale this year.
Ghana’s cedi weakened to a record as the central bank set limits on foreign-exchange transactions and ordered sales and purchases be done in the local currency, in a bid to halt the second-worst decline among African currencies this year.
The Bank of Zambia called an emergency meeting with lenders to probe a drop in the nation’s currency to a record against the dollar, two weeks after Ghana limited foreign-currency sales to halt a slide in the cedi.
Seidu Haruna, the owner of a licensed foreign-exchange bureau in the capital of Ghana, says the central bank’s clampdown on dollar sales to prop up the domestic currency will hurt business, as it drives customers to black-market traders in an alley around the corner.
Zambia’s government has withheld as much as $500 million in value-added tax repayments from mining companies failing to provide importer documentation, according to two people with knowledge of the matter.
The rand declined the most in more than five weeks as the prospect of a Greek referendum on a European Union bailout and a slowdown in Chinese manufacturing sapped demand for riskier, emerging-market assets.