Kwacha under pressure this week…
LUSAKA, Sept 03 – Zambian kwacha and Ghanaian cedi expected under pressure this week from excess dollar demand.
Zambia’s currency the kwacha is expected to trend bearishly on the back of uncertainty around the way forward with an IMF program versus the recent bilateral meeting outcomes with China.
The kwacha has been trading above 10 at highs of 10.15 and is expected to oscillate within 10.15-10.35. Last week’s treasury bill auction pushed yields higher in the 20s for one-year money signalling a rate bearish environment that is likely to affect currency negatively. Zambia’s August PMI readings will be released this week with market expectations of weaker business pulse following a turbulent august. Last PMI readings for July was 50.3 (3-month low).
Ghana’s currency the Cedi is forecast to be volatile on dollar demand from local businesses and commerce operators, analysts said.
The cedi lost ground marginally to the greenback this week as liquidity inflows thinned out, despite central bank dollar sales. It was trading at 4.89 to the dollar last week, compared to 4.85 the other week.