Kenyan, Nigerian, and Zambian currencies are projected to weaken in the coming week, while Ghana’s cedi is expected to remain stable, and Uganda’s currency may strengthen due to tax payments. Demand for foreign currency exceeds supply in Nigeria and Zambia, affecting their currencies negatively.
The currencies of Kenya, Nigeria, and Zambia face pressure in the upcoming week, while Ghana’s currency is expected to maintain stability, and Uganda’s currency may appreciate against the dollar according to traders’ insights.
In Kenya, the shilling is anticipated to weaken as banks process dividend payments from the previous year. Currently, the commercial banks quote the shilling at 129.30/129.50 to the U.S. dollar, showing a decline from last week’s 129.00/129.40. A trader mentioned that increased dollar purchases for dividends may exert additional pressure on the shilling.
Nigeria’s naira is predicted to depreciate on both the official and parallel markets due to heightened foreign currency demand exceeding central bank supply. On Thursday, the naira traded at approximately 1,550 to the dollar, compared to the previous week’s closing rate of 1,520. The widening gap between official and black market rates raises concerns for future stability unless supply improves.
Conversely, Ghana’s cedi is expected to remain stable, supported by interventions from the central bank. As of Thursday, LSEG data indicated the cedi at 15.45 to the dollar, unchanged from the previous week. Traders attribute this stability to balanced demand and supply dynamics, projecting continuity into next week under central bank support.
Uganda’s shilling is likely to appreciate as companies prepare for mid-month tax obligations. It was quoted at 3,662/3,672 to the dollar on Thursday. A trader suggested that the local currency may strengthen as major firms clear tax dues, potentially trading within the 3,630-3,660 range against the dollar.
Zambia’s kwacha is expected to decline due to increasing demand for foreign currency amidst limited supply. The currency was noted at 28.58 against the dollar on Thursday, down from 28.70 a week prior. Access Bank indicated that while the demand for foreign currency was significant, it may not lead to appreciatory gains, merely slowing depreciation.
In summary, the currencies of Kenya, Nigeria, and Zambia are likely to face depreciation pressures, primarily due to increased demand for foreign currency and supply constraints. In contrast, Ghana’s cedi is anticipated to remain stable, supported by the central bank. Uganda’s shilling may appreciate as tax payments approach. Zambia’s kwacha continues to face challenges owing to a high import demand. These dynamics will influence the regional foreign exchange landscape significantly.
Original Source: www.tradingview.com
