Kenya’s shilling, Nigeria’s naira, and Zambia’s kwacha are anticipated to weaken due to rising dollar demand and limited supply. Contrastingly, Ghana’s cedi is projected to remain stable, while Uganda’s shilling is expected to strengthen amid tax payments. Traders are closely monitoring these developments.
The currencies of Kenya, Nigeria, and Zambia are projected to experience considerable pressure in the upcoming week, whereas Ghana’s currency is expected to remain stable and Uganda’s could appreciate against the dollar, according to traders’ insights.
In Kenya, the shilling is anticipated to weaken as banks distribute last year’s dividends. The exchange rate is quoted at 129.30/129.50 to the U.S. dollar, a slight decrease from last week’s 129.00/129.40. One trader remarked that increased demand from offshore buyers aimed at repatriating dividends might lead to further depreciation unless the central bank intervenes.
Nigeria’s naira is likely to become less valuable in both official and parallel markets due to a surge in foreign currency demand exceeding supply from the central bank. Currently, the naira is trading at approximately 1,550 to the dollar, compared to 1,520 naira from the previous week. Despite central bank efforts, a trader noted that the growing demand could widen the gap with the black market and predictably lead to further decline if supply does not improve.
Conversely, Ghana’s cedi is expected to maintain stability, supported by the central bank. It remains unchanged at 15.45 to the dollar from the previous week. Chris Nettey from Stanbic Bank stated that stability is being sustained due to matched supply and demand amid ongoing central bank interventions. Sedem Dornoo of Absa Bank echoed this sentiment, predicting continued stability in the exchange rate.
In Uganda, the shilling is projected to strengthen, supported by companies preparing for mid-month tax payments. Currently quoted at 3,662/3,672 to the dollar, it has improved from last week’s close. Traders anticipate reduced demand for dollars as companies fulfill their tax obligations, leading to projected trading in the range of 3,630-3,660 against the dollar.
Zambia’s kwacha is expected to remain under pressure due to heightened demand for foreign currency against limited supply, currently positioned at 28.58 compared to 28.70 last week. Access Bank noted that increased imports of food and electricity have contributed to the currency’s depreciation, with foreign currency conversions unlikely to trigger gains but possibly slowing further decline.
In summary, the currencies of Kenya, Nigeria, and Zambia are facing significant pressures while Ghana’s cedi shows stability supported by its central bank. Uganda’s shilling is poised for potential strength as tax payments approach. The overall landscape indicates that while certain currencies could be under threat, others exhibit resilience through supportive measures.
Original Source: www.tradingview.com
