ACCRA (Reuters) – Ghana’s currency is expected to face more pressure in the next week to Thursday, Kenya’s could slip after weeks of stability and Uganda’s is seen strengthening, traders said. The Nigerian and Zambian currencies are expected to be little changed.
GHANA
Ghana’s cedi is facing headwinds because of persistent hard-currency demand driven by the manufacturing sector.
LSEG data showed the cedi trading at 16.25 to the dollar on Thursday, compared to 16.02 at last Thursday’s close.
“The local unit remained under pressure in recent sessions as FX demand was strong. Liquidity has worsened in recent sessions, with interbank bids currently rising, while offers are non-existent,” Sedem Dornoo, senior trader at Absa Bank Ghana, said.
Another trader said the cedi’s losses could continue for a long time unless there was a big increase in foreign-currency supply.
KENYA
Kenya’s shilling has been steady for weeks but could weaken slightly in the next week.
Commercial banks quoted the shilling at 128.50/129.50 per dollar, the same as last Thursday’s closing rate.
Dollar supply from remittances, tea exports and tourism has kept the shilling at the same level, one trader said.
But he said he expected the dollar to strengthen globally next week, when the U.S. presidential election and a Federal Reserve interest rate decision will be in focus.
“We could see the dollar continue to go up and the shilling to weaken further against the dollar,” he said.
NIGERIA
Nigeria’s naira is expected to hold steady thanks to central bank interventions and a reduction in foreign exchange demand.
LSEG data showed the naira at 1,673 to the dollar on the official market on Thursday, versus around 1,676 a week earlier.
The unit was quoted at around 1,730 to the dollar in street trading.
“The central bank’s dollar sales have increased liquidity, but importantly it has boosted market confidence,” one trader said.
UGANDA
Uganda’s shilling is seen trading with a firming tone as hard-currency inflows from remittances are anticipated.
Commercial banks quoted the shilling at 3,656/3,666 to the dollar, compared to last Thursday’s close of 3,660/3,670.
Remittance flows from Ugandans working abroad typically increase in the last quarter of the year as they send money to relatives for the festive holidays.
“As we enter November we’ll start to see that cyclical increase in inflows,” one trader said, adding the local unit will likely trade in a range of 3,630-3,660 against the dollar.
ZAMBIA
Zambia’s kwacha is likely to hold steady due to hard-currency conversions by companies preparing to pay taxes.
On Thursday the kwacha was trading at 26.57 per dollar from 26.60 on Wednesday last week.
“Corporates will be selling dollars … to pay taxes due in local currency,” one financial analyst said.
(Reporting by Christian Akorlie, Hereward Holland, Elisha Bala-Gbogbo, Elias Biryabarema and Chris Mfula; Editing by Alexander Winning)
