ACCRA: Ghana’s cedi is expected to weaken next week after the government failed to meet its energy bonds sales targets, while the Zambian kwacha is likely to firm amid an increasing supply of hard currency.
GHANA
Ghana’s cedi is seen weaker next week on investor uncertainty following the government’s failure to meet its sale target for a six billion-cedi energy bond last week, an analyst said.
The fairly stable local unit has weakened in the past two weeks on renewed demand by importers amid the bond sale. It was trading at 4.4400 to the dollar at 1115 GMT on Thursday, compared to 4.4075 last week.
“Traders and other participants are uncertain about whether the local currency can weather the storm soon after the less than targeted sale — it’s likely to tumble for another week if we don’t see a significant central bank support,” said Joseph Biggles Amponsah of the Accra-based Dortis Research.
ZAMBIA
The kwacha is likely to remain firm, supported by increasing hard currency supply from companies selling dollars to pay taxes.
At 1108 GMT on Thursday, commercial banks quoted the currency of Africa’s No.2 copper producer at 9.8800 per dollar, stronger than 10.0000 a week ago.
“We expect this performance to continue into next week,” one senior commercial bank trader said, adding that exporters would be encouraged to sell more dollars as the kwacha appreciated.
KENYA
The Kenyan shilling is seen stable in the coming week supported by tight money market liquidity with relatively small deals likely to move the price either way due to thin market activity, said a trader from a commercial bank.
At 0828 GMT, commercial banks quoted the shilling at 103.55/75 per dollar, compared with 103.60/80 at last Thursday’s close.
“On the spot market it’s very stable but activity on the interbank borrowing and lending side is very high,” said a trader from a commercial bank referring to the interbank lending rate of 8.848 percent.
TANZANIA
The Tanzanian shilling is expected to hold steady against the U.S dollar week with a bias to strengthen slightly, helped by a slowdown in demand for greenbacks from importers and continuing agricultural export earnings.
Commercial banks quoted the shilling at 2,243/2,248 to the dollar on Thursday, barely moved from 2,240/2,250 a week ago.
“We expect the shilling to continue being stable over the coming days, but it could appreciate due to earnings from ongoing cashew nut exports,” said a trader at CRDB Bank.
NIGERIA
The naira is expected to remain stable across its multiple exchange rates next week as the central bank continues to intervene and maintain tight money market liquidity to lure foreign inflows to support the currency.
The local unit has been hovering at around 360 naira for investors, the same level as the parallel market. On the official market, the naira has been quoted at around 305 per dollar for more than three months.
Traders say the market was comfortable at 360 level with quotes agreed over the phone and that clients withdraw their bids at weaker rates. Meanwhile the central bank has been selling dollars on the official market.
UGANDA
The Uganda shilling is seen trading in a stable range on the back of easing demand by merchandise importers and typical end-of-year inflows from Ugandans working abroad.
At 1114 GMT commercial banks quoted the shilling at 3,630/3,640, stronger than last Thursday’s close of 3,647/3,657.
“I think we’ll start to see an elevated level of inflows start to come in,” said a trader from a leading commercial bank, adding most of the new inflows will be from Ugandan diaspora workers returning for year-end holidays or sending remittances to relatives. The shilling would oscillate in the 3,620-3,640 level, he said.
Source: Brecorder.com
