LUSAKA, Oct 11 (Reuters) - The Zambian and Ugandan currencies are expected to come under pressure in the coming week while that of Ghana is likely to firm.
The kwacha is likely to remain under pressure next week following Zambia’s downgrade on Thursday by ratings agency Fitch and on increasing demand for dollars.
News of the downgrade sent the currency of Africa’s No.2 copper producer tumbling to hit 12.3000 per dollar at 1156 GMT from a close of 11.4500 a week ago.
“We are of the view that stakeholders will begin to accumulate dollars at the current levels,” the local branch of South Africa’s First National Bank (FNB) said in a note.
Fitch downgraded Zambia to ‘B-‘ from ‘B’ and maintained its negative outlook, reflecting a substantial upward revision of the government’s fiscal deficit target.
The Uganda shilling is seen trading with a bearish tone on the back of an expected typical fourth quarter surge in hard currency demand by importers as they look to ship in extra goods for December shoppers.
At 0902 GMT, commercial banks quoted the shilling at 3,790/3,800, compared with last Thursday’s close of 3,770/3,780.
“Normally we see demand from importers go up in this quarter and we anticipate that to be the case,” said Faisal Bukenya, head of treasury at Exim Bank.
Ghana’s cedi is seen firm next week on increased central bank dollar sales amid softening forex demand by businesses, analysts said.
For a second week in a row, the local unit has steadily recouped recent losses against the greenback after weakening to record lows last month. It was trading at 4.92 to the greenback by mid morning on Thursday, compared with 4.95 a week ago. “We expect (greenback) supply to remain strong in the week ahead while demand remains stable,” Raphael Adongo Adubila, currency analyst at Accra-based Northstar Home Finance said.
The Kenyan shilling is expected to remain stable against the dollar supported by inflows from offshore investors amid thin demand from merchandise and oil importers, traders said.
Commercial banks quoted the shilling at 100.90/101.00 per dollar, compared with 100.85/95 at last Thursday’s close.
“We will get some activity in the coming week, I believe most corporates will be back,” said a trader from a commercial bank. (Reporting by Chris Mfula, Elias Biryabarema, Kwasi Kpodo, John Ndiso; Compiled by Chris Mfula; Editing by David Stamp)