The cedi has surged over 40% against the U.S. dollar so far this year, outperforming its African and emerging market peers. According to data from the London Stock Exchange Group (LSEG), the cedi was trading at 10.25 to the dollar on Thursday, strengthening from 11.55 the previous week.
“The cedi has been firm for most of the past week, though we’ve seen increased hard currency demand from offshore investors taking profit on GHS assets,” said Sedem Dornoo, senior trader at Absa Bank Ghana.
“We expect support to hold around the 10 level in the short term, and anticipate further gains once this demand eases, with the central bank maintaining daily market support,” he added.
KENYA
Kenya’s shilling is projected to remain stable. It traded at 129.00/50 to the dollar on Thursday, slightly changed from 128.95/129.45 a week earlier.
NIGERIA
Nigeria’s naira is expected to remain range-bound in the coming week, supported by central bank dollar sales and portfolio investor inflows, despite ongoing demand from importers.
On Thursday, the naira traded around 1,587 per dollar in official intraday trading, compared to 1,586 the previous week. On the parallel market, it exchanged at approximately 1,635.
“I see the naira trading between 1,580 and 1,590, anchored by central bank support. While volatility is still a risk, inflows and policy measures should help stabilize the market,” said one trader.
UGANDA
The Ugandan shilling is forecast to firm this week, buoyed by inflows from a recent Treasury bond auction. As of 0811 GMT, commercial banks quoted the shilling at 3,627/3,637, up from 3,645/3,655 the previous Thursday.
“There were significant offshore dollar inflows into the bond auction, which should strengthen the shilling,” a trader at a local bank noted.
The Bank of Uganda conducted a large, rare private placement of Treasury bonds this week, offering a total of 2.4 trillion Ugandan shillings ($661.7 million) in debt.
Credit: Reuters
