Market News

ACCRA, Oct 23 (Reuters) – Ghana’s currency could come under pressure against the dollar in the next week to Thursday, Uganda’s and Zambia’s may gain, and Nigeria’s and Kenya’s are expected to be stable, traders said.

GHANA

Ghana’s cedi could weaken as dollar demand, mostly from the retail and services sectors, outstrips supply on the interbank market.

LSEG data showed the cedi trading at 10.75 to the dollar on Thursday, compared to 10.55 at last Thursday’s close.

Andrews Akoto, head of trading at Absa Bank Ghana, said the last $150 million central bank auction on Tuesday attracted bids exceeding $300 million, indicating a sharp increase in demand.

“The oversubscription saw more than half of the bids rejected, and we expect the resulting backlog of FX demand in the market to spur a stronger dollar in the week ahead,” he added.

NIGERIA

Nigeria’s naira is expected to be stable, after the market settled around 1,460 to the dollar without heavy central bank intervention.

The naira was quoted at 1,462 to the U.S. currency on the official market on Thursday, compared with 1,475 a week earlier.

The currency was changing hands at 1,500 to the dollar in street trading.

“It has been at (1,460) levels for a few days. I expect it to remain at these levels in the coming week,” one trader said. “This is where we can say there is equilibrium demand and supply.”

KENYA

Kenya’s shilling should also be steady as foreign-currency inflows from Kenyan workers abroad broadly match importer demand.

Commercial banks quoted the shilling at 129.00/129.40 to the dollar, compared to last Thursday’s close of 128.95/129.35.

A trader said he was seeing inflows from diaspora remittances and commodities exporters but there was also strong demand from energy importers among others.

“So both counters are well-matched, I don’t expect any major movement on either side,” he said.

UGANDA

Uganda’s shilling is seen trading with a strengthening tone, supported by dollar inflows from charities and commodity exporters.

Commercial banks quoted the shilling at 3,480/3,490 to the dollar, compared to last Thursday’s close of 3,460/3,470.

A trader said he expected healthy inflows from non-governmental organisations, which typically convert some of their hard-currency holdings around the end of the month to pay salaries and other expenses.

“So the local unit will draw a bit of support from those and also some commodity flows,” he added.

ZAMBIA

Zambia’s kwacha may add to recent gains against the dollar next week as dollar supply improves from companies preparing to meet month-end obligations.

On Thursday commercial banks quoted the kwacha at 22.64 per dollar from 23.06 a week ago.

“The Zambian kwacha may extend gains further in the coming sessions, supported by increased FX inflows from month-end conversions,” Access Bank said in a note.