Discover Thomson ReutersFinancialGovernment SolutionsLegalReuters News AgencyRisk Management SolutionsTax & AccountingBlog: Answers OnInnovation @ Thomson ReutersDirectory of sitesLoginContactSupport#Ghana NewsNovember 16, 2017 / 1:35 PM / in 23 minutesWEEKAHEAD–AFRICA-FX-Kenyan shilling tied to Supreme Court ruling on repeat vote
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NAIROBI, Nov 16 (Reuters) – Kenya’s shilling will take its cue from the country’s Supreme Court when it rules on the validity of a presidential election re-run held last month, while the Nigerian naira is likely to be supported by central bank interventions.
The shilling’s direction in the next week will depend on the Supreme Court ruling on two petitions seeking to invalidate the re-election of President Uhuru Kenyatta, traders said.
At 0734 GMT, commercial banks quoted the shilling at 103.60/80 per dollar compared with 103.45/65 at last Thursday’s close.
The shilling weakened 0.5 percent when the court nullified the initial Aug. 8 presidential vote on Sept. 1 and ordered the re-run. The court has to deliver its verdict by Monday.
The naira is expected to be stable in the week ahead, supported by the central bank’s regular interventions through the injection of dollars into the market, traders said.
The currency has been hovering at around 360 naira per dollar for investors, the same level as in the parallel market. On the official market, it has been quoted at around 305 per dollar for more than three months.
“It’s been interventions all the way,” one trader said.
Ghana’s cedi is expected to remain under pressure due to demand for dollars from importers and investors settling a domestic dollar bond issued last week, traders said.
The cedi, which had been fairly stable in the second half of this year, began slipping this month on a seasonal surge in demand for dollars. It was trading at 4.5550 to the dollar compared with 4.4400 a week ago.
“The cedi could tumble again despite the central bank’s presence on the market, especially amidst the seasonally high Q4 demand and speculative buying (of dollars),” said Joseph Biggles Amponsah, head of treasury at Northstar Home Finance.
The Zambian kwacha is likely to remain under pressure against the dollar next week due to sustained demand for hard currency from importers.
At 1154 GMT, commercial banks quoted the currency of Africa’s No.2 copper producer at 10.0000 per dollar from a close of 9.9000 a week ago.
“The local currency is expected to continue to trade on the back foot as greenback demand appears to outweigh supply,” Zambia National Commercial Bank (ZANACO) said in a market note.
The Tanzanian shilling is expected to appreciate slightly against the dollar over the coming week, buoyed by month-end dollar sales by firms to meet tax and salary obligations and export earnings from the agriculture sector.
Commercial banks quoted the shilling at 2,235/2,245 to the dollar on Thursday, stronger than 2,243/2,248 a week ago.
“The shilling is expected to strengthen marginally against the dollar over the coming days due to the ongoing cashew nut export season,” said a trader at Commercial Bank of Africa Tanzania. (Reporting by John Ndiso, Chijioke Ohuocha, Kwasi Kpodo, Chris Mfula and Fumbuka Ng‘wanakilala; editing by John Stonestreet)
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