The US dollar strengthened following news of Greece’s $1.7 billion
default payment to the International Monetary Fund (IMF) and analysts’ opinions
are mixed on how African markets will be impacted.
David Shapiro, deputy chairman at Sasfin banking and financial services
group, said African markets have responded with relative stability to the
Greece crisis because the country’s default on its IMF loan payment was widely
expected.
The United States will benefit from the Greece crisis because the
dollar has strengthened while commodity prices, namely oil, declined.
Africa stands to benefit as an indirect consequence to the strong
dollar and that is the playground where majority of investors should be playing
in by trying to optimise on the dollar, said Shapiro.
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| The European Union flag (seen left) flies beside the Greek flag |
However Aly-Khan Satchu, CEO of Rich Management, disagrees saying the
Greece crisis will negatively impact strong African currencies like South Africa’s rand
and the Kenyan shilling.
“There is an enormous correlation and a high spill-over risk, we’ve
seen the rand sell-off to 12.31 and the shilling is actually weaker. The
worry is that this infection starts to spread and infects other emerging
markets and high yielding assets.”
Yra Harris, a partner at Praxis Training, added that right now the
markets are scared because they can detect uncertainty.
“The emerging markets have already taken a hit over the last 12 months
in reference to this uncertainty.”