The currencies of Uganda and Nigeria are expected to strengthen against the dollar in the next week to Thursday, while those of Ghana and Kenya should be little changed and Zambia’s may weaken, traders said.
Uganda
Uganda’s shilling is seen trading with a firming tone, as some traders expect another hike in the central bank’s interest rate at next week’s monetary policy meeting.
Commercial banks quoted the shilling at 4,040/4,050 to the dollar, compared to last Thursday’s close of 4,345/4,355.
The rate-setting meeting on November 9 comes less than a month after the central bank sharply raised the rate in an emergency move.
The last hike initially failed to arrest a slide in the shilling but over the past week the currency has recovered some ground.
“We anticipate another hike but of a lower magnitude, so that sentiment or expectation and also the fact that liquidity is really scarce will boost the shilling,” a trader said.
Nigeria
Nigeria’s naira could rally next week as global risk sentiment has improved after the U.S. midterm elections.
The naira was quoted at 1,346 to the U.S. currency on the official market on Thursday, compared with 1,349 a week earlier.
The currency was changing hands at 1,400 to the dollar in street trading.
“I expect an appreciation on the naira considering what has happened in the US. Right now there is a bit of risk-on sentiment and that would be positive for our own market,” a trader said.
Ghana
Ghana’s cedi is expected to be little changed, underpinned by improved market liquidity and easing corporate foreign-currency demand.
LSEG data showed the cedi trading at 11.67 to the dollar, compared with 11.63 a week before.
“The currency is likely to remain range-bound in the week ahead, supported by improved interbank liquidity and softer corporate demand as businesses gradually wind down for the festive season,” a trader said.
Another trader said he did not expect any wide swings in the dollar-cedi rate due to matched dollar demand and supply.
Kenya
Kenya’s shilling is forecast to be stable.
Commercial banks quoted the shilling at 129.85/130.05 per dollar, compared with last Thursday’s close of 129.90/130.00.
Zambia
Zambia’s kwacha is expected to continue facing headwinds due to sustained hard-currency demand for energy and agricultural imports.
On Thursday commercial banks quoted the kwacha at 20.62 per dollar from 20.55 a week ago.
Source: CNBCAfrica
