Kenya's, Nigeria's currencies seen weakening
Corrects to say Ghana's cedi is trading at 15.83 to the dollar, not 16.83
KAMPALA, Nov 21 (Reuters) -Kenya's and Nigeria's currencies are forecast to weaken against the dollar in the next week, traders said.
KENYA
Kenya's shilling KES= is expected to weaken as dollar demand from local industry surpasses inflows from exporters.
Commercial banks quoted the shilling at 129.00/130.00 per dollar, slightly weaker than last Thursday's closing rate of 128.70/129.70.
"Based on what we've seen since last week, we expect that demand to continue going (up)," one trader said. "It is a wait-and-see to see whether the supply from the diaspora will cover that demand. If it doesn't, we might see it maintaining that weakening trend."
NIGERIA
Nigeria's naira is expected to lose ground in the coming week after it fell below a psychological level of 1,700 this week, owing to demand pressures ahead of the festive season amidst inadequate supply from the country's central bank.
The currency was changing hands at 1,753 to the dollar in street trading NGNP= on Thursday while it NGN=D1 was quoted at 1,631 to the dollar on the official market on Thursday, LSEG data showed.
"The rates are not getting better despite central bank trickle interventions, which just stem the tide. But the black market tells where the true value of the naira is," one trader said.
"Until supply improves, we might see rates sliding towards 1800s level."
GHANA
Ghana's cedi GHS= is expected to continue its recent rally against the dollar on ample remittance inflows and strong central bank support to meet importers' demand.
LSEG data showed the cedi trading at 15.83to the dollar on Thursday, compared to 16.00 at last Thursday's close.
"The cedi has maintained its edge in recent sessions as FX liquidity has remained strong. Continued support from the central bank has greatly contributed to this," Sedem Dornoo, senior trader at Absa Bank Ghana, said.
"Additionally we’ve also seen stronger remittance inflows as we approach the holiday season. In the coming week, I expect more of the same with the local unit likely to post further gains," he added.
UGANDA
The Ugandan shilling UGX= is expected to weaken, undercut by a surge in demand for hard currency from energy sector importers.
Commercial banks quoted the shilling at 3,690/3,700, compared with last Thursday's closing rate of 3,665/3,675.
A trader at one commercial bank said the market was receiving substantial demand for hard currency from energy importers, with fuel dealers seeking dollars to pay for extra shipments for the anticipated demand surge in December.
"That dynamic will keep activity on the demand side elevated," he said, adding the shilling would likely weaken to 3,720 levels versus the dollar in the coming week.
ZAMBIA
Zambia's kwacha ZMW= is likely to continue trading on the back foot against the dollar next week due to scant supply amidst high demand mainly triggered by energy sector imports.
On Thursday, the currency of Africa’s second-largest copper producer was trading at 27.66 per dollar from 27.33 per dollar a week earlier.
Severe drought has hit Zambia’s hydroelectric power production, forcing the southern African nation to ration and import electricity.
"In the absence of healthy inflows, the kwacha is likely to continue minor losses in the short term," Zambia National Commercial Bank (ZANACO) said in a note.
Reporting by Sonia Rao, Christian Akorlie, Chris Mfula, Chijioke Ohuocha, Elias Biryabarema; Editing by George Obulutsa and Tasim Zahid
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