DAR ES SALAAM, March 30 (Reuters) - Tanzania’s shilling looks likely to hold steady next week on increased dollar inflows from mining and the corporate sector, while Ghana’s cedi is not expected to extend recent gains as investors await a replacement for the central bank governor.
The Tanzanian shilling is expected to hold steady against the dollar in the days ahead, helped by increased dollar inflows from mining and corporate sectors.
Commercial banks quoted the shilling at 2,233/2,238 to the dollar on Thursday compared to 2,228/2,238 a week ago.
“There has been an increase of supply of dollars to the market from mining companies plus end-of-month inflows from corporates. But, we don’t see the local currency moving one way or the other next week,” CRDB Bank trader Moses Kawiche said.
Ghana’s cedi is also seen flat against the dollar as investors await a replacement for central bank governor Abdul-Nashiru Issahaku who resigned on Wednesday.
After touching record lows of 4.7420 to the dollar early this month, the cedi has regained strength, rallying to 4.3700 by mid-morning on Thursday compared with 4.5600 a week ago. It is down 2.9 percent since January, according to Reuters data.
“...Amidst a rate cut and the Governor’s resignation, the cedi’s recent gains are likely not to be extended into next week as market participants assimilate both decisions,” Dortis Research analyst, Joseph Biggles Amponsah, said.
The central bank on Monday slashed its benchmark interest rate by 200 basis points to 23.5 percent, the biggest cut for more than a decade.
Nigeria’s naira is seen range bound in the coming week after the central bank set the rate for retail customers at close to its official rate for consumers in its bid to lure people away from the black market and achieve currency convergence.
The naira was quoted at 380 to the dollar on the black market on Thursday, stronger than the 400-per-dollar rate it traded at last week, having closed at 306.50 a dollar on the official interbank market on Wednesday, compared with 308 last week.
On Tuesday, the central bank set a new naira rate of 362 per dollar which will bring bureaus’ selling price at close to the rate of 360 a dollar for retail customers at commercial banks.
Traders said with the regular injection of dollars into both the official interbank and black markets by the central bank, the naira should remain unchanged in both.
The Zambian kwacha could come under pressure next week as importers take advantage of favourable rates to buy hard currency.
At 1033 GMT on Thursday, commercial banks quoted the currency of Africa’s No. 2 copper producer at 9.5500 per dollar, the level at which it closed a week ago.
“Hard currency supply is slowly drying up amid relatively high demand,” the Zambian unit of Atlas Mara, BancABC, said in a note.
The Kenyan shilling could weaken due to a pick-up in demand from oil importers and manufacturers buying dollars to make end-of-month obligations, traders said.
By 1127 GMT, commercial banks quoted the shilling at 102.95/103.05 per dollar, the same as last Thursday’s close.
“We expect pressure to be short lived after end-month obligations are settled,” one trader at a commercial bank, referring to demand from importers, said.
The Ugandan shilling is seen weakening in the days ahead on the back of a rebound in appetite for hard currency from firms in the manufacturing, energy sectors and commercial banks looking to cover short positions.
At 0930 GMT commercial banks quoted the shilling at 3,605/3,615, weaker than last Thursday’s close of 3,590/3,600.
“We’re seeing a recovery in demand (for dollars) from especially manufacturing and fuel importers,” one trader said.
He said commercial banks were also starting to beef up positions after the shilling weakened past the psychologically important level of 3,600 this week. (Reporting by Fumbuka Ng‘wanakilala, Kwasi Kpodo, Oludare Mayowa, Chris Mfula, John Ndiso and Elias Biryabarema; Compiled by Olwethu Boso; Editing by Louise Ireland)