The Ghanaian and Zambian currencies are expected to strengthen against the dollar in the next week to Thursday, while Nigeria’s is likely to remain broadly stable, traders said.
GHANA
Ghana’s cedi could draw support from improved foreign-currency liquidity following continued central bank interventions.
LSEG data showed the cedi trading at 11.30 to the dollar, compared to 11.80 a week earlier.
“We expect the cedi to trade stronger against the dollar in the week ahead, supported by ebbed corporate FX demand and improved interbank liquidity,” said Andrews Akoto, head of trading at Absa Bank Ghana.
“Recent central bank interventions have effectively cleared the persistent corporate FX demand that weighed on the currency in May. This softening demand for the greenback is underscored by the central bank FX auction on Tuesday, where bids reached only 44% of the total amount on offer,” he added.
ZAMBIA
Zambia’s kwacha should gain ground due to robust copper prices, supportive central bank policies and positive market sentiment.
Commercial banks quoted the currency of Africa’s second-largest copper producer at 17.54 per dollar, stronger than 17.92 a week earlier.
“The (mining) sector continues to anticipate robust full-year growth, which should help offset the negative impact of higher oil prices on the current account. Further supporting the bullish case is the substantial improvement in economic fundamentals,” said Diego Barnuevo, a market analyst at financial services firm Ebury.
NIGERIA
Nigeria’s naira is expected to be steady, underpinned by dollar sales by the central bank.
LSEG data showed the naira at 1,360 to the dollar in intraday trading, the same as a week earlier.
On the street market the currency traded around 1,390 to the dollar.
“We expect the naira to remain stable as the central bank continues to sell dollars and keep up its aggressive OMO (Open Market Operations) programme to mop up naira,” one trader said.
Source: Reuters
