Kenya's shilling is likely to extend its rally against the dollar next week if a new constitution passes a referendum on August 4. Zambia's kwacha and Nigeria's naira are also seen firming up against the dollar.
KENYA Kenya's shilling edged higher on Thursday as money markets welcomed a surprise interest rate cut late on Wednesday and as the currency rode hopes that a new constitution will be approved in a referendum on August 4. The central bank's decision to cut its benchmark rate by 75 basis points to 6 percent was seen as boosting Kenya's economic outlook and stabilising the money market. The shilling was quoted at 80.40/60, up from Wednesday's close of 80.55/65.
ZAMBIA The kwacha is expected to continue to firm up against the dollar due to foreign investors buying the currency of Africa's biggest copper producer to invest in its high-yielding treasury bills and government bonds. Furthermore, copper prices are at a three-month high, suggesting more dollars will flow into the country in the coming weeks, pushing the US currency down against the kwacha.
"We expect the kwacha to consolidate between 4880-4980 with a bias towards a stronger local unit," said Stanley Tamele, Standard Chartered's local head of global markets. The kwacha surged 5 percent this week to 4,850, its highest since early May.
UGANDA Uganda's shilling is seen holding firm versus the dollar due to low corporate demand for the US currency and meagre flows from aid agencies. Commercial banks traded the local currency at 2,235/240 per dollar, higher than 2,255/2,260 at last Thursday's close. It is expected to trade within the 2,225-2,250 range in days ahead.
TANZANIA Tanzania's shilling is likely to remain under pressure after drifting to 1,515 to the dollar on Thursday from 1,505 a week ago.
GHANA Investor interest in Ghana bonds is expected to strengthen the cedi next week after it posted a 0.55 percent gain on Wednesday to reverse weeks of decline, caused mainly by a widening trade deficit. The cedi closed on Wednesday at $1.4480 from $1.4600 a week ago. The level of demand for a three-year government bond issue due on Friday is also likely to set the tone for the next week.
NIGERIA The naira is seen appreciating further next week if state-run energy firm NNPC and Mobil sell more dollars towards the end of the week as expected. The local currency firmed to 150.30 to the dollar on Wednesday from 150.41 the previous day after weaker-than-expected dollar demand at the official window provided needed support for the naira. At the central bank's bi-weekly forex auction on Wednesday, the regulator sold all of the $190 million demanded at 148.60 a dollar.
Comments
Comments are closed.