ACCRA Nov 3 (Reuters) – Ghana and Uganda’s currencies are seen ceding ground to the dollar over the next week on the back of a typical seasonal surge in demand while Nigeria’s naira is seen holding steady, helped by a central bank intervention.
Ghana’s cedi could be on the ropes as seasonal forex demand by firms exerts pressure until a planned central bank foreign exchange auction on the interbank market in mid-November.
At 1130 GMT on Thursday the cedi was quoted at 3.9800 to the greenback, compared to 3.9770 a week ago.
“Amidst uncertainty regarding its ability to withstand the surge in fourth quarter demand …, buoyed by election spending, the cedi is likely to be tested,” Analysts Joseph Biggles Amponsah of the Accra-based Dortis Research said.
Nigerian naira is seen stable around its present level at both the official interbank and parallel market as the central bank steps up support for the local currency, traders said.
The local currency was steady at 470 to the dollar on the parallel market on Thursday, same level as last week, while the naira was quoted at 315 on the official window.
On Tuesday, Nigeria’s central bank sold around $330 million to meet part of a backlog of forex demand by manufacturing firms, while dollar supply from international money transfer agencies has helped ease a shortage at the parallel market.
The Kenyan shilling could weaken in the coming days due to strong dollar demand from manufacturers and oil importers while inflows from horticultural products, exporters and charities slowed.
At 1054 GMT, commercial banks quoted the shilling at 101.50/70 to the dollar compared with 101.30/50 at last Thursday’s close.
“We expect it to weaken due to sustained foreign currency demand from manufacturers,” said a trader from a commercial bank.
The Ugandan shilling is forecast to lose ground as importers ramp up demand for hard currency to pay for merchandise shipments ahead of the Christmas shopping season.
At 1045 GMT on Thursday, commercial banks quoted the shilling at 3,475/3,485, weaker than last Thursday’s close of 3,463/3,473.
“We expect the typical shopping season to trigger greater activity on the demand side,” said Faisal Bukenya, head of market making at Barclays Bank.
The Tanzanian shilling is expected to hold steady in the days ahead, with a possibility of marginal appreciation, helped by inflows from the agriculture sector.
Commercial banks quoted the shilling at 2,178/2,185 to the dollar on Thursday, little changed from 2,178/2,188 a week ago.
“The slowdown in demand for dollars coupled with increased inflows from cashew nut exports are expected to keep the shilling steady at same levels next week or the local currency could appreciate slightly,” said Moses Kawiche, a trader at CRDB Bank.
The kwacha is seen coming under pressure against the dollar next week on the back of a squeeze in the supply of hard currency.
At 1139 GMT on Thursday, commercial banks quoted the currency of Africa’s No.2 copper producer at 9.8300 per dollar from 9.8000 a week ago.
“Pressure is likely to mount on the kwacha next week because there are no dollar conversions after payment of salaries,” independent analyst Maambo Hamaundu said. (Reporting by John Ndiso, Fumbuka Ng’wanakilala, Chris Mfula, Kwasi Kpodo, Oludare Mayowa; Compiled by Elias Biryabarema; Editing by Tom Heneghan)
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