The Ghana cedi is projected to strengthen in the coming week, supported by ongoing remittance inflows and central bank interventions, while Kenya’s shilling is expected to remain stable and Nigeria’s naira to remain range-bound, traders said.
GHANA
This year, the cedi currency has risen by more than 40% against the US dollar, beating its African and emerging market rivals.
According to data from the London Stock Exchange Group (LSEG), the cedi traded at 10.25 per dollar on Thursday, down from 11.55 per dollar at the last Thursday’s close.
“The cedi has remained on the front foot for much of the last week, however, we’ve observed some increased hard currency demand from offshore players in the most recent sessions as they look to take profit from GHS investments,” Sedem Dornoo, an Absa Bank Ghana senior trader pointed out.
“We reckon we’ll continue to see support around the current 10 levels in the very near term, however, the local unit will likely begin to rally again when this demand is cleared as the central bank continues to provide daily support to the market,” the economist stated.
KENYA
Kenya’s shilling is predicted to remain stable next week. The shilling was trading at 129.00/50 per dollar, up from 128.95/129.45 at the close on Thursday.
Nigeria’s naira is expected to remain within its trading range this week, despite import demand.
The weekly dollar sales by the central bank and inflows from portfolio investors are likely to sustain the naira’s stability.
In intraday trading on Thursday, the naira was quoted at roughly 1,587 per dollar, compared to last week’s closing value of 1,586.
On Thursday, the currency traded at roughly $1,635 per dollar on the street.
“I see the naira trading between 1,580 and 1,590, boosted by the central bank’s dollar sale. Though volatility is still likely, domestic policy and dollar inflows could help stabilise the market, according to one trader.
UGANDA
The Ugandan shilling is projected to strengthen against the dollar, aided by inflows from this week’s Treasury auction, dealers say.
At 0811 GMT, commercial banks quoted the shilling at 3,627/3,637, up from 3,645/3,655 at the end last Thursday.
“There was significant offshore (dollar) inflows into the bond auction, which I think will give the shilling a boost,” said a trader at one bank.
This week, the central bank hosted a big and rare private placement treasury bond auction, offering 2.4 trillion Ugandan shillings ($661.70 million) in debt.
