Ghana's cedi may slip to an all-time low next week due to elevated dollar demand ahead of Christmas, while firm year-end remittance flows should help east Africa's shillings maintain their broad recovery from this year's record slide.
GHANA The cedi could hit a new all-time low below 1.64 to the dollar in the next few weeks due to increased corporate demand for dollars to pay for imports in the lead-up to Christmas, traders said. Christopher Nettey of Standard Bank quoted the cedi at 1.6325/50 to the dollar slightly down from an open of 1.6320/45.
KENYA Kenya's shilling is seen to gaining ground as greenback demand eases and holiday remittance and tourism flows climb towards year-end, but the market is watching out for the outcome of the meeting of central bank's rate-setting committee.
The central bank has raised its key lending rate by 9.5 percentage points since October to 16.5 percent to tame inflation which climbed to 18.9 percent and support the battered shilling. However, an increase could push it to 88 to the dollar, he said.
TANZANIA Tanzania's shilling is expected to remain stable at around 1,700-1,710 to the dollar due to a slowdown in business activity and the central bank's decision to sell dollars directly to major importers to curb speculative trading. Commercial banks in Dar es Salaam quoted the shilling at 1,705/1,710 against the dollar, compared to last Thursday's close of 1,695/1,705. Traders said they expected the shilling to trade in the 1,700-1,710 range in the coming days.
UGANDA Uganda's shilling is forecast to bounce back from four days of losses, lifted by remittances from Ugandans abroad and dollars from tourists visiting for Christmas and year-end holidays. After hitting a string of record lows this year to 2,901 on September 23, the shilling has recovered 10.6 percent amid aggressive monetary tightening by the central bank. The shilling was likely to move in the 2,550-2,660 range, he added.
ZAMBIA The kwacha is expected to remain on the back foot against the dollar as the euro zone's debt crisis continues to sap investors' appetite for high-risk debt, although the central bank may step in to prop it up. The kwacha traded between 4,600 and 4,850 for much of 2011 but retreated as low as 5,150 in the immediate aftermath of September's election victory by long-time opposition leader Michael Sata.
NIGERIA The naira may remain stable or weaken slightly against the dollar depending on the volume of foreign exchange flows from energy companies at their month-end dollar sales and the willingness of central bank to intervene. The naira was trading at 159.40 on the interbank market firmer than Wednesday's 159.85 close.