Thursday, June 24, 2021

    WEEKAHEAD-AFRICA-FX: Ghana, Zambia currencies to weaken, Naira, others to remain steady

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    Naija247news Media, New York
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    ACCRA, May 17 – The Ghanaian Cedi and Zambian kwacha are forecast to extend losses against the dollar in the next week to Thursday, while Nigeria and other currencies are expected to hold steady, traders said.

    The Nigerian naira is seen stable against the dollar next week for investors as offshore funds buy short-term money market bills after the local currency eased last week, traders said.

    Lenders traded the naira at 363 last week due to increased demand for dollars as companies repatriated dividends following the end of the earnings season. Some portfolio investors also took.

    Traders said the naira was quoted at 361 on Thursday and could maintain that level into next week on improved dollar liquidity from international investors.

    On the official market, the naira was quoted at 305.85, supported by the central bank’s regular intervention.

    Ghana’s cedi could lose further ground against the dollar next week pending the drawdown of proceeds of last week’s sovereign debt sale, analysts said.

    The cedi, which had been fairly stable this year, has weakened in the past two weeks, touching 4.46 on Wednesday. It was trading at 4.59 to the greenback by mid morning on Thursday, compared with 4.54 a week ago.

    Looking ahead, the cedi is likely to remain under pressure and could cross the 4.6 mark as market traders seek to improve their positions, pending inflows from the bond, said currency analyst Raphael Adubila.

    The kwacha is expected to weaken marginally as the market continues to experience reduced supply of foreign currency while demand remains constant.

    Commercial banks quoted the currency of Africa’s second-largest copper producer at 10.1900 per dollar on Thursday.

    “We expect the local currency to remain subdued in the short-term because the greenback continues to remain constrained, demand sustains,” a local commercial bank treasurer said anonymously.

    “I see support at 10.000 and resistance at 10.2500 going into next week,” he added.

    The Kenyan shilling is expected to remain steady against the dollar in the coming week due to inflows from offshore investors offsetting demand from oil importers and manufacturing sector, traders said.

    Commercial banks quoted the shilling at 100.45/55 per dollar, compared with 100.30/50 at last Thursday’s close.

    “We are likely to trade at current levels.. some inflows from private equity investors…energy and manufacturing buyers are active,” said a senior trader at a commercial bank.

    The Tanzanian shilling is seen holding steady against the U.S. dollar or strengthen marginally, helped by a slowdown in demand for hard currency and inflows from the mining sector.

    Commercial banks quoted the shilling at 2,282/2,287 to the dollar on Thursday, weaker than 2,276/2,286 a week ago.

    “We expect to see stability of the local currency next week due to subdued demand for dollars and inflows of dollars from mining companies and some offshore clients,” said a trader at CRDB Bank.

    The Uganda shilling is seen trading stable over the next one week with players seen unwilling to take hard currency positions at levels weaker than 3,720.

    At 1046 GMT commercial banks quoted the shilling at 3,710/3,720, unchanged from last Friday’s close.

    “From what we have seen there does not seem to be (hard currency) appetite past current levels,” Faisal Bukenya, head of treasury at Exim Bank told Reuters.

    The local currency would likely play in the 3,700-3,720 range over the coming days. (Reporting by Kwasi Kopodo, Chiwoyu Sinyangwe, John Ndiso, Chijioke Ohuocha, Fumbuka Ng’wanakilala and Elias Biryabarema Compiled by Patricia Aruo; Editing by Toby Chopra)

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