ACCRA, March 15 (Reuters) – Ghana’s currency is likely to firm next week as most other African currencies come under pressure.
Ghana’s cedi is expected to remain firm against the dollar on increasing forex inflows underpinned by growing investor interest in the West African economy, an analyst said.
The local currency, which has strengthened 1.9 percent since January, was trading at 4.4155 to the greenback by mid-morning on Thursday, up from 4.4500 a week ago.
“We expect the cedi to trade within the 4.4100 to 4.200 range as market participants prepare for the central bank to issue the 3-year bond in the last week of Q1,” said Raphael Adubila of Accra-based Northstar Home Finance.
The Ugandan shilling is likely to weaken over the next week on the back of a pickup in demand for dollars from typical bulk buyers such as energy, telecom and manufacturing firms.
At 0946 GMT commercial banks quoted the shilling at 3,655/3,665, weaker than last Thursday’s close of 3,650/3,660.
Benon Okwenje, a foreign exchange trader at Stanbic Bank, said the shilling would weaken slightly.
The Kenyan shilling is expected to remain under pressure due to excess liquidity in the money markets and dollar demand from sectors such as energy, traders said.
Commercial banks quoted the shilling at 101.20/40 per dollar, almost the same as last Thursday’s close.
“The shilling I expect that towards next week we might see a bit of end-month demand … (mostly) from the energy sector,” a trader at one commercial bank said.
A second trader said excess liquidity in the money market would also weigh down the shilling.
The kwacha is expected to lose steam next week after this week’s gains, which were supported by hard-currency sales by companies paying taxes.
On Thursday, commercial banks quoted the currency of Africa’s No.2 copper producer at 9.5500 per dollar, stronger than a close of 9.6250 last Wednesday, when trading ended for the week.
“We should see a slight depreciation of the kwacha after the end of tax payments. It can’t hold the gains made this week,” independent financial analyst Maambo Hamaundu said.
The Tanzanian shilling may hold steady against the dollar or strengthen slightly next week, buoyed by a slowdown in dollar demand from importers and expected month-end inflows as companies convert hard currency to pay taxes and salaries.
Commercial banks quoted the shilling at 2,258/2,264 to the dollar on Thursday, weaker than 2,255/2,260 a week ago.