Accra, Ghana — The Ghanaian, Ugandan and Zambian currencies could lose ground against the dollar in the week ahead, while Kenya’s shilling is expected to be little changed, traders said.
GHANA
Ghana’s cedi is expected to be under sustained pressure due to a significant pick-up in demand from the energy and services sectors, as well as foreign portfolio investors.
LSEG data showed the cedi trading at 10.70 to the dollar, compared with a close of 10.45 last Thursday.
“We expect FX demand from local corporate accounts to firm up in the coming sessions as businesses return from the holidays,” said Andrews Akoto, head of trading at Absa Bank Ghana.
He said there was a high level of unmet demand from the recent central bank auction on Tuesday, which saw more than $350 million in bids, against a total offer of $125 million.
“This could spur a stronger dollar in the coming sessions, Akoto added.
UGANDA
Uganda’s shilling USDUGX is seen trading with a weakening bias in coming weeks as jitters about possible election-related violence undermine confidence in the currency, traders said.
Commercial banks quoted the shilling at 3,570/3,580 to the dollar, compared with last Wednesday’s close of 3,615/3,625.
“There’s a bit of uncertainty and worry around the election in terms of whether some unrest will follow … that will hit confidence,” said an independent FX trader in Kampala.
ZAMBIA
Zambia’s kwacha USDZMW is likely to see volatility next week due to an anticipated rise in demand for hard currency and dwindling supply.
Commercial banks quoted the currency of Africa’s second-largest copper producer at 20.05 per dollar, from 22.35 on Friday last week.
The kwacha made strong gains this week as corporates offloaded dollars after the central bank’s late-December directive curbing foreign currency use in domestic transactions, Access Bank said.
“This momentum potentially faces some near-term headwinds around mid-January as the broader economy returns to full capacity and pent-up corporate dollar demand resurfaces,” it added.
KENYA
Kenya’s shilling USDKES is projected to remain steady next week when businesses reopen.
The shilling traded at 128.85/129.15 per dollar, compared with last Wednesday’s closing rate of around 128.90.
