Market News

Aug 28 (Reuters) – Ghana’s and Zambia’s currencies are expected to remain under pressure in the next week to Thursday, while Uganda’s could strengthen and those of Kenya and Nigeria should be broadly steady, traders said.

GHANA

Ghana’s cedi is expected to extend its recent losses next week on the back of persistent corporate demand for foreign currency as supply from the central bank remained insufficient to meet requests at its competitive auctions.

LSEG data showed the cedi trading at 11.15 to the dollar on Thursday compared to 10.95 at last Thursday’s close.

“We expect the cedi to remain on the back foot against the dollar in the coming week, as a backlog of corporate FX demand remains unfilled,” one trader said.

At the central bank’s auction on Wednesday, bids exceeded $244 million compared with just $100 million sold, the trader added.

ZAMBIA

Zambia’s kwacha is likely to remain under pressure against the dollar next week due to high corporate demand for hard currency, which continues to outweigh supply.

On Thursday, the kwacha was quoted at 23.68 per dollar from 23.53 a week ago.

“In the absence of healthy inflows, demand for dollars will remain higher than supply, putting pressure on the kwacha,” a foreign exchange trader said.

UGANDA

Uganda’s shilling is seen firming in the days ahead, helped by offshore investor inflows of dollars and month-end flows from remittances and commodity exporters, traders said.

Commercial banks quoted the shilling at 3,549/3,559 to the dollar, compared to last Thursday’s close of 3,560/3,570.

Advertisement

A trader at one commercial bank said the market was anticipating significant inflows of foreign exchange from offshore investors who will participate in a planned Treasury bond auction.

“The flows from that source will provide quite a significant boost to the local unit,” he said, adding that some inflows are also expected from typical month-end flows from remittances and commodity exporters.

The central Bank of Uganda is due to auction 990 billion Ugandan shillings ($278.25 million) worth of Treasury bonds of various tenures on September 3.

KENYA

Kenya’s shilling is expected to trade flat in the coming days with inflows from diaspora workers matching demand from merchandise importers, traders said.

At 0957 GMT commercial banks quoted the shilling 129.00/129.40, unchanged from last Thursday.

A trader at one commercial bank said the shilling was expected to benefit from typical end-month remittances from Kenyans working abroad but that would be matched by existing demand.

Advertisement

NIGERIA

Nigeria’s naira is expected to trade within a range next week, supported by dollar sales by the central bank and foreign portfolio investors, amid rising demand from importers.

The naira opened at around 1,535 to the dollar on Thursday, compared with last week’s closing quote of 1,533 naira.

The currency was changing hands around 1,545 to the dollar in street trading on Thursday.

“All through the week it has traded at 1,535/1,538 levels. All things being equal, I expect it to trade at those levels next week,” one trader said.

“The central bank intervenes from time to time whenever the market tilts toward 1,540 levels.”

($1 = 3,558.0000 Ugandan shillings)