Kenyan, Ugandan and Ghanaian currencies are expected to remain steady next week, with traders in Uganda and Ghana watching out for the impact of the US interest rate hike.
KENYA: The Kenyan shilling is expected to trade in a tight range next week, with the prospect of central bank intervention keeping a lid on any depreciation by the local currency. The shilling was trading at 102.40/50 on Thursday afternoon, weaker then last Thursday's close of 101.80/101.90.
Nairobi-based traders say the local currency was likely to be stuck in the 102.00-102.50 range, with the central bank expected to defend the 102.50 level, as it has done several times in the past, by selling dollars.
UGANDA: The Ugandan shilling is forecast to be range-bound as dollar demand tails off before holidays, but the US interest rate increase may feed a slight weakening bias. Commercial Banks quoted the shilling at 3,390/3,400, weaker than last Thursday's close of 3,365/3,375.
"Corporate demand will largely remain absent because firms are closing books for the year. However, I expect some residual fears from US interest rate decision ... those fears could cause some marginal weakening," said a trader from a leading commercial bank.
GHANA: Ghana's cedi is seen steady until year end as economic activity slows while businesses ponder the potential impact of Wednesday's US interest rate hike on the West African economy. The local currency has been steady in the fourth quarter after slumping nearly 30 percent in the first half of the year. It was trading at 3.8250 to the greenback at 1125 GMT on Thursday, compared to 3.83 a week ago.
"In the week ahead, though demand pressure remains firm, the cedi is expected to extend its stability as traders watch to see where the greenback will trade," said Joseph Biggles Amponsah, an analyst at the Accra-based Dortis Research.
ZAMBIA: The kwacha is likely to be under pressure as investors shift from risky emerging market assets following the Fed interest rate increase. At 0714 GMT, commercial banks quoted the currency of Africa's No 2 copper producer at 10.8880 from 10.9300 at which it closed a week ago. "There will be movement of money from investments in emerging markets, so there will be pressure on the local economy and the kwacha," said Charles Mudiwa, the chief executive of the Zambian branch of South Africa's Standard Bank, Stanbic Bank.
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