Cedi, Kwacha to Gain on Dollar, Naira Steady This Week
By Aboki Forex —
The Ghanaian cedi and Zambian kwacha are set to strengthen against the U.S. dollar in the week to Thursday, while Nigeria's naira is expected to hold steady, traders said on Monday.
Ghana's cedi is gaining support from improved foreign currency liquidity after continued central bank interventions. LSEG data showed the cedi trading at 11.30 to the dollar, up from 11.80 a week ago.
“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.”
Zambia's kwacha is also expected to gain, driven by 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, firmer 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's naira is expected to remain stable, underpinned by dollar sales from the central bank. LSEG data showed the naira at 1,360 to the dollar in intraday trading, unchanged from 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 programme to mop up naira,” one trader said.