Ghana’s cedi is expected to ride the wave of positive investor sentiment after the government’s successful negotiations with the International Monetary Fund, while other African currencies are likely to hold steady.
GHANA
The cedi has struggled against the greenback since mid-January but held its own this week.
Ghana reached a deal with the IMF for a $930 million three-year aid program to fix its economy, dogged by high deficits, public debt and a crippling energy crisis.
The deal could represent a turning point for Ghana, a stable democracy and producer of gold, cocoa and oil whose economy lost much of its shine since it reported a budget deficit of nearly 12 percent in 2013.
“We expect the recent stability to be maintained… and we expect the IMF package to further strengthen the local currency,” said Kwabena Yeboah Owusu of the Accra-based think-tank Dortis.
ZAMBIA
Zambia’s kwacha was buoyed by the government’s move this week to relax rules that have prevented $600 million in tax refunds being paid to foreign mining firms.
But traders warned the kwacha would remain on the back foot until the government finds a long lasting solution to the row.
On Thursday, commercial banks quoted the kwacha at 6.9600 per dollar from 7.0500 a week ago.
“Although the government is making positive strides towards resolving the impasse with the mines, the measures will only have a lasting impact once all the issues are resolved,” one commercial bank trader said.
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KENYA
Traders said the tapering off of month-end corporate dollar demand would take pressure off Kenya’s shilling, with currency seen anchored in 91.25/75 to 91.35/85 range next week.
Inflows from tea sales, the horticulture sector and non-governmental organisations had helped offset most of the import demand for dollars, they said.
Traders saw a weakening bias heading into next week, as companies begin to pay out dividends.
“I do expect some companies to start paying dividends, so we might stay on a weakening bias,” said Sheikh Mehran, head of trading at I&M Bank.
UGANDA
Dealers predicted a firmer Ugandan shilling next week, underpinned by foreign exchange inflows from offshore investors drawn to high yields on government debt.
Commercial banks quoted the currency at 2,889/2,899, weaker than last Thursday’s close of 2,865/2,875.
“The yields on our debt are very attractive … I would anticipate a lot of interest from offshore fund managers and other foreign investors,” said David Bagambe, a trader at Diamond Trust Bank.
TANZANIA
Tanzanian shilling will need support from central bank dollar sales to meet forex demand from factories, dealers said.
“There is demand for dollars from the manufacturing sector for imports of raw materials,” said Theopistar Mnale, a dealer at TIB Development Bank. The shilling could trade between 1,830 and 1,840, traders said.
The Bank of Tanzania said on its website it had traded $73.65 million on the interbank foreign exchange market over the past week.
