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AFRICA-FX: Kenyan shilling, Zambia’s kwacha to firm, Nigeria’s naira, Ghana’s Cedi to hold steady

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Naija247news, Nigeriahttps://www.naija247news.com/
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

NAIROBI, April 5 – Kenya’s shilling and the Zambian kwacha are expected to firm on the back of increased demand for local currency, while the Nigerian naira and Ghana’s cedi are set to hold steady.

The naira is likely to remain stable, a day after the central bank maintained its tight policy on interest rates to support currency, traders said.

The central bank on Wednesday kept interest rates on hold at 14 percent, a level it has retained for over a year to curb inflation and prop up the naira. The bank has also been mopping up naira liquidity to curb speculation on the currency.

On the official market, the naira was quoted at around 305.60, supported by the central bank. It traded at 360 per dollar for investors.

The shilling is expected to strengthen against the dollar in the coming week, on the back of increased interbank borrowing of local currency to meet the credit reserve ratio.

On Thursday, commercial banks quoted the shilling at 100.95/101.15 per dollar, compared with 100.80/101.00 a week ago.

“We are seeing an uptick in the interbank rate – a case of banks borrowing to meet cycle targets,” said a trader from a commercial bank referring to the daily interbank rate of 6.4476 percent, which rose from 6.2448 percent on Wednesday.

The Tanzanian shilling is expected to come under pressure in the coming days, weighed down by demand for dollars from oil and manufacturing sectors.

On Thursday, commercial banks quoted the shilling at 2,260/2,265 to the dollar, compared to 2,259/2,264 a week ago.

“The shilling will likely come under pressure next week. After breaching 2,260 levels, it could hit 2,270 levels if demand for dollars continues to build up,” said a trader at CRDB Bank.

Ghana’s cedi is seen stable on sufficient dollar inflows, with the Bank of Ghana’s set to launch weekly sales to match corporate demand, analysts said.

On Thursday, it was trading at 4.4450 to the dollar at 1045 GMT on Thursday, compared to 4.4190 a week ago.

“We expect the cedi to see some stability in the week ahead, trading around the 4.43 figure on the basis of stable demand and adequate supply,” said Raphael Adubila of Accra-based Northstar Home Finance.

Uganda’s shilling is expected to trade in a narrow range, awaiting a cue from a central bank key rate decision, although moderate weakening is likely.

At 0932 GMT, commercial banks quoted the shilling at 3,690/3,700, weaker than last Thursday’s closing level of 3,685/3,695.

The Bank of Uganda’s monetary policy committee is due to meet on Monday and issue its benchmark rate. A trader said the shilling would likely tread water awaiting that decision with a “possibility of slight depreciation from importer demand.”

The kwacha is expected to continue trading on the front foot next week, propped by hard currency conversions by companies preparing to pay taxes due by April 15.

At 1030 GMT on Thursday, commercial banks quoted the currency at 9.3700 per dollar from a close of 9.400 a week ago.

“The local unit is expected to maintain its bullish trend in the short term as more corporates convert to settle quarterly and mid-month statutory obligations,” local commercial bank Cavmont said in a note on Thursday. (Reporting by Chijioke Ohuocha, John Ndiso, Fumbuka Ng’wanakilala, Kwasi Kpodo, Elias Biryabarema and Chris Mfula; Compiled by Aaron Maasho)

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