"After the dust over the election has settled, real trading will resume, leading to a surge in dollar demand by traders for their Christmas imports," said Sampson Akligoh of Databank Research group. "Higher than planned election-related spending could also work against the cedi." Analysts say uncertainty over the election result could also put minimal pressure on the local currency as some firms, especially multinationals, withhold dollars for post-election operations. But the main driver is likely to be seasonal. The cedi was at 1.8886 to the dollar on Thursday, in line with the day's open. Nettey said the dollar-cedi rate could touch 1.900 levels next week.
KENYA: Kenya's shilling is expected to hold steady against the dollar in the week ahead, helped by diaspora inflows ahead of the holidays. The shilling traded at 85.90/86.00 to the dollar barely changed from last Thursday's close of 85.85/86.05. Remittances are a key source of hard currency for the east African nation. Remittance inflows hit $876.3 million in the first nine months of the year, on track to surpass the record $891.1 million received in the whole of 2011. Traders said the shilling would likely trade in the 85.80-86.20 range in the days ahead.
UGANDA: Uganda's shilling is seen trading in a narrow range in the coming days as any support from aid agencies converting hard currency into shillings is offset by the impact of foreign aid cuts. Commercial banks in Kampala quoted the currency of east Africa's third-largest economy at 2,685/2,695, close to last Thursday's close of 2,690/2,700.
Market players say dollar demand is falling as importers close their books ahead of the festive season and the shilling is likely to trade in a range of 2,690-2,721 in the days ahead. Other traders, though, saw a more bearish tone for the local currency. An unexpected rate cut by the central bank this week and a slew of aid freezes by donors over corruption charges have sapped investor confidence, some traders said.
TANZANIA: Tanzania's shilling is seen holding steady against the dollar in the coming week, helped by a slowdown in demand for dollars, traders said. Commercial banks in Tanzania's commercial capital, Dar es Salaam, quoted the shilling at 1,602/1,608 to the dollar on Thursday, weaker than the 1,594/1,604 quoted a week ago. "We don't think there will be any major movements in the market either way," said Flora Mrema, a dealer at Tanzania Investment Bank. Market participants said they expect the shilling to trade in the 1,590-1,600 range next week.
NIGERIA: The naira is seen strengthening next week on the back of possible dollar sales by the state-owned energy company, NNPC, and a gradual decline in demand for the greenback as importers wind down their operations for the year. The currency was trading at 157.32 to the dollar on the interbank market at 1441 GMT, marginally weaker than its 157.04 close the previous day. Traders said demand for hard currency is declining as companies wind down for the year and as some oil companies sell dollars in the market.
ZAMBIA: Zambia's kwacha is seen losing further ground against the dollar next week due to increased seasonal demand for hard currency. The kwacha was at 5,235 to the dollar on Thursday, weaker than last Thursday's close of 5,225. "Going into next week, the kwacha remains vulnerable to losing further ground against the dollar and is expected to trade around 5,300," said one currency trader.