Cedi to slide further as Ghana’s FX backlogs persist, naira stable
By Aboki Forex —
NAIROBI, May 14 (Reuters) – Ghana’s cedi is expected to weaken further against the dollar over the next week, while currencies in Kenya, Nigeria and Uganda should hold steady. Zambia’s kwacha may strengthen, traders said.
The cedi is under pressure from persistent corporate demand for foreign currency, especially from the energy sector. LSEG data showed the cedi trading at 11.34 to the dollar, compared to 11.26 a week earlier.
“The cedi is likely to continue its steady slide as FX backlogs persist,” one trader said. “Corporate FX demand has remained firm, while mining sector FX inflows and central bank auction allocations have so far been insufficient to offset it.”
Kenya’s shilling is expected to remain stable. Importer demand for dollars is matched by inflows. Commercial banks quoted the shilling at 128.95/129.25, compared with last Thursday’s close of 129.05/25. “We expect it to remain stable,” a trader said.
Nigeria’s naira is forecast to be broadly stable. Dollar sales by the central bank and higher oil receipts provide support. LSEG data showed the naira at 1,368 to the dollar in intraday trading on Thursday, compared with 1,356 a week earlier. On the street market, the currency traded around 1,400 to the dollar.
“What we’re seeing is the market settling into a balance, driven by the central bank’s interventions and also steady inflows from oil receipts,” a trader said.
Uganda’s shilling is seen little changed after the central bank maintained its policy rate. Commercial banks quoted the shilling at 3,735/3,745 to the dollar, compared to last Thursday’s close of 3,750/3,760. On Thursday, the central bank left its benchmark lending rate at 9.75% for the seventh policy meeting in a row. It expects inflation to rise moderately in the second half of the year, driven by the effects of the Iran war.
“After the central bank chose to extend a neutral stance, I think the unit will maintain a broadly stable range,” a trader said.
Zambia’s kwacha could advance against the dollar due to strong foreign-currency inflows from the mining sector and foreign financial institutions. On Thursday, the kwacha was quoted at 18.98 per dollar, from 19.19 a week ago.