By Hlengiwe Ndlovu | 2018-02-25
FOR the first time in three years, the lilangeni strengthened against major currencies in January, the Central Bank of Swaziland (CBS) states in its Recent Economic Developments Report.
The lilangeni, according to CBS, benefitted from a combination of factors such as political developments in South Africa, commodity price booms and the weakening of the US dollar. The local currency strengthened against the pound sterling at 4.4 per cent to E16.91 and against the euro by 4.7 per cent to average E14.88 in the same period
The lilangeni appreciated to E12 per dollar compared to December 2017 when the local currency strengthened by 7.5 per cent to average at at E12.20 against the same currency.
According to the Central Bank, investor sentiments were renewed in South Africa as the new African National Congress leadership put growth-oriented policies in place, thus boosting the rand’s performance to which the lilangeni is pegged.
“The structural reforms introduced by the new ANC president and the expected tough national budget has also fuelled the optimism that South Africa’s further credit rating downgrade by Moody’s may be avoided, thus benefiting the performance of the rand. Moreover, a positive economic outlook by the South African Reserve Bank (SARB) also encouraged the positive performance of the rand,” the bank said, also predicting that the current depreciation of the US dollar and the strong commodity prices will continue to support the rand, hence the local unit. Meanwhile, CBS indicated that preliminary figures for January indicate that public debt stood at E12.6 billion, an equivalent of 21.6 per cent GDP which reflects a decrease of 1.1 per cent from a revised figure of E12.7 billion recorded in December 2017.
“As at the end of January 2018, external debt stood at E5.4 billion, corresponding to 9.2 per cent of GDP.
Decrease
This shows a decrease of 2.2 per cent from the revised figure of E5.5 billion recorded in December 2017,” CBS said, attributing the decrease to a bulk of debt service payments made in the month under review also coupled with a strengthening of the lilangeni against the US dollar as well as other major currencies in which the country’s liabilities are denominated.
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