NAIROBI, Aug 8 (Reuters) – Kenya’s currency is forecast to strengthen against the dollar in the next week to Thursday, while Ghana’s, Nigeria’s and Zambia’s are expected to be relatively stable, and Uganda’s could fall, traders said.
KENYA
Kenya’s shilling could gain ground, helped by remittances and offshore dollar inflows to buy government bonds.
Commercial banks quoted the shilling at 128.50/129.50 per dollar, compared with last Thursday’s closing rate of 129.00/130.00.
“It will remain fairly supported, with a bias to a stronger shilling. We might see some attraction on the upcoming infrastructure bond sale, it might attract some foreign investor flows,” one trader said.
Kenya’s central bank is selling infrastructure bonds worth a total of 50 billion shillings this month.
GHANA
Ghana’s cedi is seen trading relatively stable next week on matched demand and supply on the interbank market.
LSEG data showed the cedi trading at 15.54 to the dollar, from 15.48 at last Thursday’s close.
“We expect the cedi to remain stable at the current levels, barring any resurgence of aggressive bidders on the market,” said Selasi Kabo, a forex trader at Stanbic Bank Ghana.
“The local unit traded relatively stable against the dollar in the past week, with very little activity between market makers,” said Sedem Dornoo, a senior trader from Absa Bank Ghana.
“Up ahead, we could see some pressure on the cedi in the next few weeks given upcoming coupon payments on the restructured bonds, as coupon recipients may look to purchase hard currency,” he added.
NIGERIA
Nigeria’s naira is expected to trade around current levels after the central bank intervened in the market this week to ease pressure on the currency.
LSEG data showed the naira was quoted at 1,580 to the dollar on the official market on Thursday, compared with around 1,625 a week ago. The unit sold at about 1,620 in street trading on Thursday.
On Wednesday the central bank sold $876 million at 1,495 naira to the dollar at its first retail auction to end users. The naira was quoted at 1,628 to the dollar before the auction result was announced.
“The sale of dollars directly to retail end users at a below market rate will see the recent pressure on the naira cool off,” one trader said.
ZAMBIA
Zambia’s kwacha is expected to hold steady in the coming week on improved dollar inflows and reduced demand for hard currency.
The currency of Africa’s second-largest copper producer traded at 26.05 to the dollar on Thursday, from 25.95 at the close of business a week ago.
“The local unit is likely to remain stable with a bias to post minor gains on improved market liquidity amid a slowdown in importer (dollar) appetite,” Zambia National Commercial Bank said in a note.
UGANDA
Uganda’s shilling is seen trading with a moderately weakening tone on the back of an interest rate cut by the central bank.
Commercial banks quoted the shilling at 3,725/3,735 to the U.S. dollar, compared to last Thursday’s close of 3,730/3,740.
“There will be a bit of a negative sentiment from the rate decision that will negatively weigh on the shilling, but I don’t anticipate a significant movement,” one trader said.
On Wednesday the Bank of Uganda cut its benchmark lending rate by 25 basis points, saying a recovery in the shilling had led to an improvement in the inflation outlook.
(Reporting by George Obulutsa, Christian Akorlie, Elisha Bala-Gbogbo, Elias Biryabarema and Chris MfulaEditing by Alexander Winning)
