AFRICA-FX: Nigeria’s Currency Could Rise and Ghana’s Cedi Fall
Nigeria’s currency is forecast to edge up against the dollar in the next week to Thursday, while Ghana’s and Zambia’s may weaken, and Kenya’s should remain steady, traders said.
NIGERIA
Nigeria’s naira could gain slightly in the coming week, supported by central bank dollar sales and subdued foreign-currency demand.
The naira was quoted around 1,478 naira to the dollar on the official market on Thursday, versus a closing quote of 1,485 a week earlier.
The currency was changing hands at 1,485 naira to the dollar in street trading .
“I expect the naira to edge stronger this week, thanks to easier funding conditions which (are) helping to reduce pressure on liquidity and rising reserves (giving) the central bank some room to manoeuvre,” one trader said.
GHANA
Ghana’s cedi may be under pressure due to strong demand for dollars from the manufacturing, energy and services sectors.
LSEG data showed the cedi trading at 12.50 to the dollar on Thursday compared to 12.30 at last Thursday’s close.
“The cedi remains on a gradual depreciation path despite sustained interventions by the central bank through its FX auctions,” said Chris Nettey, head of trading at Stanbic Bank Ghana.
“Market dynamics suggest that competition for scarce dollar inflows outside the official window is intensifying, adding pressure on the local unit. We expect this trend to continue in the coming sessions,” he added.
ZAMBIA
Zambia’s kwacha is likely to be on the defensive because of sustained corporate demand for hard currency.
On Thursday the kwacha was quoted at 23.99 per dollar from 23.97 a week ago.
“Given current market conditions where demand for hard currency continues to outstrip supply, the kwacha is likely to remain under pressure,” Access Bank said in a note.
KENYA
Kenya’s shilling is expected to be little changed, as it has been all year.
The shilling traded at 129.00/40 per dollar, compared with last Thursday’s close of 128.90/129.30.
“We see it remaining stable, dollar demand is equally supported by supply,” a trader said.
