Strong international demand for Ghanaian bonds look set to push the cedi higher next week. Nigeria's naira and the Zambian kwacha should also post gains against the dollar.
GHANA The cedi is expected to make further gains versus the dollar due to strong foreign demand for bonds and increasing confidence in the economy after Fitch raised Ghana's outlook last week to "stable" from "negative". The cedi closed Wednesday at 1.4260, adding to recent gains that analysts have attributed to the positive effect of capital account surpluses and weak corporate demand for the dollar.
The Bank of Ghana is auctioning 300 million cedi ($210 million) of a three-year bond on Thursday, and Biggles Joseph Amponsah of Access Bank Ghana said offshore investor appetite remained very high.
NIGERIA The naira is likely to strengthen below 154 to the dollar next week due to possible dollar sales by energy companies that have yet to execute normal month-end sales. The Nigerian currency weakened to 154.60 to the dollar at the interbank market on Thursday from 154.52 naira on Wednesday due to strong dollar demand, especially from lenders covering oversold positions.
At the central bank's auction, the naira closed at 149.85 to the dollar on Wednesday from 150.05 on Monday after the regulator raised dollar supply to calm the market and lend support to the local currency. The regulator has sold a total of $1.38 billion this week to support the naira.
ZAMBIA The kwacha is likely to remain stable next week against the dollar due to increased inflows of the US currency from exporters and higher demand for the local currency by corporates preparing to pay taxes. On Thursday, the kwacha was at 4,820 to the dollar, the same as last week.
"Next week we expect the kwacha to be a bit bullish but stable within the range of about 4,800-4,900 mainly on account of dollar inflows from traditional and non-traditional exporters," one bank trader said.
KENYA Kenya's shilling is expected to firm against the dollar, lifted by increased global appetite for risk. Commercial banks quoted the unit at 80.70/90 to the dollar, compared with last Thursday's close of 81.15/25. "If global risk appetite continues, we will see it go to 80.00," said Steve Lagat, a trader at CFC Stanbic Bank. Charts also pointed to a stronger unit. Traders said they expected the shilling to trade in the 80.00-81.50 range in coming days.
UGANDA The Ugandan shilling is seen strengthening, supported by end-of-month dollar flows from development agencies and a low appetite for the greenback. Commercial banks quoted the local currency at 2,242/2,247 per dollar compared with 2,244/2,255 last Thursday. Traders expect the shilling to trade in a range of 2,235-2,255 in the coming days.
TANZANIA The Tanzanian shilling looks likely to remain range-bound or weaken slightly in the coming week. Commercial banks posted the unit at 1,502/1,503 to the dollar compared with 1,518/1,522 at last Thursday's close. "Corporate customers are not looking for dollars at the moment. They are focusing on buying the shilling to meet month-end and quarter-end commitments for paying salaries and taxes," said National Bank of Commerce trader Hezron Msigwa.