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Traders have told Reuters that the Zambian and Ghana currencies could lose ground against the dollar in the next week to Thursday, while those of Kenya, Nigeria and Uganda are expected to be little changed.
Ghana’s cedi may slip on persistent foreign-currency demand, mostly from offshore investors and local businesses importing goods.
This is according to the Reuters Daily Briefing newsletter. LSEG data showed the cedi trading at 11.46 to the dollar, compared with a close of 11.35 last Thursday.
One trader pointed to strong demand at last Tuesday’s central bank FX auction, where bids totalling over US$221 million far exceeded the US$100 million allocated.
“While central bank auctions and mining sector inflows will provide some relief, they are likely to cover only a portion of the backlog of demand,” the trader added.
Ronald Mensah, a trader at Stanbic Bank Ghana, said he expected robust dollar demand to continue.
“Although market sessions remain relatively quiet, we expect the bid trend to persist,” he added.
Zambia’s Kwacha is likely to remain under pressure as hard-currency demand outpaces supply.
On Thursday the kwacha was quoted at K23.58 per dollar from k23.16 a week ago.
“The direction of travel is unlikely to change in the near-term given limited hard-currency supply and heightened demand ahead of the festive holidays,” Access Bank said in a note.
Kenya’s shilling is projected to extend a long-running period of stability.
Read more: Kwacha extends losses against dollar for second session driven by demand-side pressures
Commercial banks quoted the shilling at 129.05/45 per dollar, compared with last Thursday’s close of 129.20/60 and Nigeria’s naira is expected to trade within a range.
Traders have cited dollar sales by the central bank and steady remittance inflows offsetting seasonal demand for imports.
The naira was quoted at 1,447 per dollar on the official market on Thursday, compared with 1,445 a week earlier.
In street trading it was changing hands around 1,480 per dollar.
“All indicators point to range-bound trading for the week ahead, with the naira likely within the range of between 1,445 and 1,460 to the dollar,” a trader said.
As for Uganda ,the shilling is seen as steady as hard-currency demand is balanced by inflows from diaspora workers.
Commercial banks quoted the shilling at 3,550/3,560 to the dollar, compared to last Thursday’s close of 3,540/3,550.
“There’s a bit of appetite from energy importers because of the expected surge in demand during the holidays, but also diaspora flows are healthy,” a trader said.
He said the shilling was likely to trade in the 3,530-3,560 range in the coming days.
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