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African currencies' performance against the US dollar: The Ugandan shilling may come under pressure.
Expectations of support from the Central Bank of Ghana for the cedi
Written by Ziad Abdel Fattah:
Market traders said that Ugandan currency It may fall against the dollar next week until Thursday, while the currencies of Ghana, Kenya and Nigeria may be generally stable, and the Zambian currency is expected to continue its recent gains.
According to Reuters, the Ugandan shilling is expected to come under pressure as traders said they believe the Ebola outbreak is scaring off some tourists at a time when the energy sector is experiencing strong demand for foreign currency due to high global oil prices.
One trader said that the Ebola situation is prompting some tourists to reconsider their travel plans, and this will affect dollar inflows, while tourism is one of Uganda's largest sources of foreign currency.
Commercial banks priced the shilling at 3763/3773 against the dollar on Thursday, compared with 3775/3785 a week earlier.
Ghana currency
The Ghanaian cedi may find some support from the central bank, which has increased the frequency and size of foreign exchange auctions.
Data from the London Stock Exchange Group showed the cedi was trading at 11.72 against the dollar, compared with 11.66 a week earlier. Although unmet demand for foreign currency from local corporate accounts remains large, continued intervention at such high volumes is likely to slow the recent decline in the value of the local currency, Andrews Akoto, head of trading at Absa Bank Ghana, told Reuters.
The central bank had offered $160 million in auction last Tuesday, in addition to $300 million on Wednesday.
Kenyan currency
The Kenyan shilling is expected to remain stable, driven by expatriate inflows that offset demand for the dollar.
Commercial banks indicated that the shilling was trading at 129.25/35 to the dollar, compared to last Thursday's closing price of 129.25/65.
Nigerian currency
The Nigerian currency (Naira) may not see much change or may rise slightly, after international oil companies sold foreign currency this week to support their domestic operations.
The naira was priced at 1360 against the US dollar in the official market on Thursday, compared to 1373 a week earlier.
The currency was trading at 1393 to the dollar in off-market trading.
One trader said: “The Nigerian currency has seen an increase; we expect it to stabilize next week or rise further.”.
Zambian currency
The Zambian kwacha is likely to remain in a good position due to strong hard currency inflows from copper exports.
Commercial banks priced the currency of Africa's second-largest copper producer at 17.92 against the dollar, up from 18.69 a week earlier, on Thursday.
