Ghana Cedi: Cedi, Zambian kwacha seen strengthening

Ghana's cedi is expected to remain flat this week on an expected central bank dollar sale to offset increased demand as businesses mobilise funds for their end-of-quarter import bills, analysts said.

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Ghana Cedi

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The cedi is expected to remain flat this week on an expected central bank dollar sale, while the Zambian kwacha is expected to marginally firm, supported by dollar inflows from companies making tax payments.

GHANA

Ghana's cedi is expected to remain flat this week on an expected central bank dollar sale to offset increased demand as businesses mobilise funds for their end-of-quarter import bills, analysts said.

The local unit weakened nearly 4 percent in January on seasonal high corporate dollar demand, but it has since recovered the losses. It was trading at 3.8450 to the dollar by 1120 GMT on Thursday, up from 3.8900 last two weeks and down 1.2 percent year-to-date.

"There is a growing (dollar) demand towards end of quarter commitments that could put pressure on the cedi, but this is likely to be counter-balanced by expected central bank sales," said Accra-based Dortis Research analyst Joseph Biggles Amponsah.

ZAMBIA

The kwacha is expected to marginally firm this week, supported by dollar inflows from companies paying taxes due on March 14.

At 1242 GMT, the commercial banks quoted the currency of Africa's second-biggest copper producer at 11.370 per dollar, the same level from a week ago.

"We might start seeing some activity as we head towards mid-month as corporates start converting to meet mid-month obligations," analysts at BancABC said in a note.

NIGERIA

The Nigerian naira is seen flat against the dollar on both the parallel and official interbank markets this week, as buyers continue to resist further depreciation of the local currency on the black market and central bank maintains control over the currency.

The local currency was quoted at 320 to the dollar on Thursday, broadly flat compared with the 310 to the dollar last week on the parallel market. The naira was trading around the peg rate of 197.5 to the dollar on the official window.

"The recent gains in oil price at the global market has raised hope that the local currency may no longer be under much pressure, staving off devaluation threat," one trader said.

Traders said most currency buyers are not willing to pay higher for the dollar at the black market because of the government stands on devaluation and possible support for the naira by rising global oil price.

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UGANDA

The Ugandan shilling could strengthen a little over the week, helped by thin corporate demand and the central bank mopping up liquidity.

At 1043 GMT commercial banks quoted the shilling at 3,345/3,355 stronger than last Thursday's close of 3,360/3,370.

A trader from a leading commercial bank said the shilling would oscillate between 3,325-3,375, though tending toward a stronger side.

"Generally low demand ... and the central bank taking out of excess liquidity will feed a bullish bias for the (local) unit," the trader said, referring to Bank of Uganda's 408 billion Ugandan shillings repurchase agreement (repo) on Thursday.

TANZANIA

The Tanzanian shilling is expected to strengthen slightly against the dollar in the days ahead, helped by a slowdown in demand for the U.S. currency from importers.

Commercial banks quoted the shilling at 2,184/2,194 to the dollar on Thursday, unchanged from a week ago.

"We expect the shilling to gain strength as we are approach the end of the first quarter," said Hakim Sheikh, head of trading at Commercial Bank of Africa Tanzania.

KENYA

Kenya's shilling is expected to remain stable against the dollar thiss week, boosted by interest in a bond sale.

"The shilling will be well-supported," said one trader at a commercial bank, saying the shilling was likely to remain in a range of 101-30 to 101-80.

By 1043 GMT on Thursday, the shilling was quoted at 101.30/50, compared with last Thursday's close of 101.30/40.

Kenya's central bank will receive bids for re-opened 10-year and 15-year Treasury bonds worth 25 billion shillings ($246.79 million) between March 4 and March 15, and auction them on March 16.

 

Credit: Reuters

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