ACCRA, March 1 (Reuters) – Ghana’s cedi may come under pressure next week but other African currencies are likely to remain stable.
The cedi could slip next week on an expected surge in dollar demand as businesses mobilise forex to settle end-of-quarter bills, an analyst said.
The cedi has remained firm in the past week on positive investor sentiment about the West African nation’s economy. It was quoted at 4.4575 to the greenback on Thursday compared to 4.4650 a week ago.
“As we enter the last month of Q1, we expect demand for the dollar to pick up as we anticipate brisk business by both importers and corporates, reversing part of the cedi’s gains made in the last month,” said Raphael Adubila of Accra-based Northstar Home Finance.
The Kenyan shilling is expected to remain stable against the dollar, supported by remittances and horticulture export earnings, traders said.
Commercial banks quoted the shilling at 101.30/40 per dollar, compared with 101.85/95 at last Thursday’s close.
“We’ve had customers selling dollars … local players who are usually paid in dollars like the tea sector, they were offloading (dollars) that’s why the shilling strengthened,” said a trader from a commercial bank.
The Ugandan shilling is seen trading stable over the next one week amid a slump in appetite for hard currency from both importers and commercial banks.
At 1017 GMT commercial banks quoted the shilling at 3,640/3,650, stronger than last Thursday’s close of 3,655/3,665.
A trader at a leading commercial bank said demand was weak from merchandise importers hurt by slow consumer spending. The shilling would play in the 3,640-3,655-range over the coming days, he said.
The kwacha is likely to remain stable in the coming week, supported by higher copper prices and a favourable credit rating from negative to stable by ratings agency Moody‘s.
At 1125 GMT on Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 9.7300 per dollar, stronger than a close of 9.8200 a week ago.
“The currency has been trading in the 9.700-9.850 range for the most part of the last few months. It will take a significant shift in dynamics to break the firmly established range,” the local branch of South Africa’s First National Bank (FNB) said.
The shilling is expected to hold steady against the dollar in the days ahead, buoyed by a slowdown in demand for greenbacks from major importers.
Commercial banks quoted the shilling at 2,253/2,258 to the dollar on Thursday, weaker than 2,247/2,257 a week ago.
“The supply of dollars is matched by demand, so we expect to see the same shilling-dollar exchange rate levels to be maintained next week,” said a trader at CRDB Bank. (Reporting by Kwasi Kpodo, John Ndiso, Elias Biryabarema, Chris Mfula and Fumbuka Ng‘wanakilala; Compiled by Chris Mfula; Editing by William Maclean)