ACCRA, Feb 16 (Reuters) - Ghana’s cedi is expected to remain under pressure next week amid market uncertainty over a weaker-than-expected 2016 while the Zambian kwacha is likely to hold its gains supported by dollar inflows from investors buying bonds.
Ghana’s often volatile cedi could remain on the ropes next week on offshore dollar demand, amid market uncertainty over how the new government will address the country’s weaker-than-expected fiscal results for 2016.
Ghana’s currency has been under pressure since mid-January, when the new government announced it had uncovered contract arrears equivalent to $1.6 billion and a budget deficit close to double digits, or around double the 2016 target of 5.25 percent of gross domestic product.
It touched a low of 4.4600 to the dollar by mid-morning on Thursday, compared with 4.4100 a week ago, and down 5.5 percent
The Nigerian naira faces fresh pressure on the parallel market with dollar supply coming short of demand by persons seeking currency to pay school fees abroad as the central bank continue to ratio forex for businesses.
The local currency was quoted at 510 naira per dollar on the black market on Thursday, weaker than last week’s 500 to the dollar. Demand for dollars has soared even though Nigeria’s forex reserves have reached their highest in more than 12 months. The naira continues to trade flat on the official interbank window at 305.5 to the dollar.
Traders said demand pressure is mounting at the black market but dollar supply has not significantly improved, suggesting further depreciation of the local currency may be coming.
The kwacha is expected to hold its gains next week supported by dollar inflows from foreign investors planning to take part in a bond issue on Feb. 24.
At 1013 GMT on Thursday, commercial banks quoted the kwacha at 9.6750 per dollar, firmer than a week ago when it closed at 9.8000.
Kenya’s shilling is expected to hold steady, with a bias to weaken because of dollar demand from importers, traders said.
At 1220 GMT, commercial banks quoted the shilling at 103.65/75 to the dollar, compared with last Thursday’s close of 103.50/60.
The Tanzanian shilling is seen remaining flat against the dollar in the coming days as demand for dollars weakens.
Commercial banks quoted the shilling at 2,230/2,240 to the dollar on Thursday, unchanged from a week ago.
Reporting by Kwasi Kpodo, Oludare Mayowa, Chris Mfula, George Obulutsa, Fumbuka Ng'wanakilala,; Compiled by Tanisha Heiberg; Edited by Larry King