Kenya, Nigeria, and Zambia’s currencies are expected to weaken, while Ghana’s cedi remains stable and Uganda’s shilling may strengthen. Economic factors such as banks’ dividend payments, foreign currency demand, and mid-month tax obligations are influencing these trends. The kwacha faces pressure from limited foreign currency supply amid increasing imports.
The currencies of Kenya, Nigeria, and Zambia are anticipated to experience downward pressure in the upcoming week, while Ghana’s cedi is expected to remain stable. Uganda’s shilling may potentially strengthen against the U.S. dollar, according to market traders’ insights.
In Kenya, the shilling (USDKES) is forecasted to weaken due to local banks’ payment of last year’s dividends. Commercial banks are quoting the shilling at 129.30/129.50 to the dollar, showing a decline from the previous week’s close of 129.00/129.40. A trader commented, “As banks announce their results, offshore people will be looking to buy dollars to repatriate their dividends.”
Nigeria’s naira is also projected to decline in both official and parallel markets. Currently, the naira (USDNGN) is trading around 1,550 to the dollar, a notable increase from the 1,520 naira recorded previously. A trader stated, “Rising dollar demand has upset the stable rates we have seen in the last couple of weeks, despite central bank interventions. “, indicating a widening gap with black market rates.
Conversely, Ghana’s cedi (USDGHS) is expected to remain steady owing to support from the central bank. As of Thursday, the cedi was unchanged at 15.45 to the dollar. Chris Nettey, head of trading at Stanbic Bank Ghana, noted, “Cedi has maintained its stability this week amid matched demand and supply, anchored by central bank’s FX auctions. “, suggesting that stability will likely persist into the next week.
In Uganda, the shilling (USDUGX) may gain strength as companies approach mid-month tax payments. It was quoted at 3,662/3,672 to the dollar, slightly better than last week’s 3,665/3,675. A trader expressed anticipation for a reduced demand for dollars as firms meet their tax obligations, forecasting the shilling to trade within the 3,630-3,660 range.
Zambia’s kwacha (USDZMW) is expected to face challenges due to increasing demand for hard currency amidst limited supply. Currently, the kwacha is at 28.58, slightly lower than the previous rate of 28.70. Access Bank remarked that “Foreign currency conversions may not be sufficient to trigger gains but could merely slow depreciation,” highlighting the economic pressures from rising imports.
In summary, the currencies of Kenya, Nigeria, and Zambia are projected to face declines amid specific local economic pressures. Meanwhile, Ghana’s cedi is expected to maintain its stability, supported by central bank measures. Uganda’s shilling could strengthen due to tax-related activities, whereas Zambia’s kwacha is likely to weaken further due to high demand for foreign currency and limited availability. Continuous monitoring of these currencies will be essential for understanding the broader economic landscape in these African nations.
Original Source: www.tradingview.com
