By Angela Moonga
The Zambian Kwacha is expected to post further gains against the United States of America (USA) dollar this week, according to international news media Reuters.
The local currency which has appreciated to trade at K18.64 and K18.69 for bid and offer according to the Bank of Zambia (BoZ) website, is expected to sustain the gains this week into Thursday.
”Zambia’s kwacha is likely to continue trading on the front foot, helped by improving macroeconomic fundamentals and resilient copper prices,” the Reuters story stated in part. “On Thursday (last week) the currency of Africa’s second-largest copper producer was trading at 19.09 per dollar, better than 20.29 a week ago.
They quoted loca economist Kelvin Chisanga as saying that the central bank measures restricting foreign-currency usage were also supporting the kwacha.
The Kwacha was mentioned together with the Nigerian Naira, among the currencies that are expected to appreciate this week, while those of Kenya and Uganda should be stable and Ghana’s may fall, traders said.
On the Nigerian Naira, the gain was attributed to foreign exchange supply improvements, driven by strong oil receipts and flows from foreign investors attracted by the high yields on the country’s debt.
The unit was quoted at 1,364 to the dollar in intraday trading on Thursday, strengthening from 1,388 a week ago.
The naira was changing hands at around 1,445 to the dollar in street trading .
”Market sentiment has swung firmly bullish on the naira, lifted by high oil prices and clearer FX rules. If the upcoming bond auction is strongly oversubscribed, liquidity could tighten further and push the currency toward the 1,350 level,” one trader said.
As for Kenya’s shilling, the currency is expected to hold steady, as dollar demand from manufacturers and oil-marketing companies matches inflows from the tourism and horticulture sectors.
Commercial banks quoted the shilling at 128.90/129.10 per dollar, the same as at last Thursday’s close.
”It has been steady. Supply and demand has been equally matched,” a trader said.
And Uganda’s shilling is seen stable until Monday, as traders hold off from taking positions ahead of an interest rate decision by the central bank.
Its direction after that could be influenced by Monday’s rate announcement.
”We’re likely to see relatively subdued activity ahead of the (monetary policy) meeting,” a trader said.
Commercial banks quoted the shilling at 3,553/3,563 to the dollar compared with last Thursday’s close of 3,561/3,571.
Ghana’s cedi could face headwinds next week on persistent hard-currency demand from sectors including energy.
LSEG data showed the cedi trading at 10.95 to the U.S. currency from 10.90 a week ago.
”A stronger dollar is likely to persist in coming sessions, spurred by unfilled demand observed at recent central bank FX auctions,” said Andrews Akoto, head of trading at Absa Bank Ghana.
Another trader said the cedi had shown a gradual weakness in recent sessions as demand for dollars continued to outweigh supply.
”The cedi is likely to weaken further in the coming week,” the trader added.
Reporting by Elisha Bala-Gbogbo, Chris Mfula, George Obulutsa, Elias Biryabarema and Christian Akorlie; Editing by Alexander Winning
