Traders anticipate a dynamic week in African currency markets as Kenya’s shilling and Zambia’s kwacha are predicted to face downward pressure, while the Ugandan shilling is expected to strengthen. Ghana’s cedi is forecasted to remain steady, and Nigeria’s naira may exhibit mixed signals, according to market insights.
Kenya’s shilling is anticipated to slip due to increased foreign-currency demand from the manufacturing sector. Kenyans living abroad seeking higher exchange rates for their dollars are contributing to the pressure. Commercial banks quoted the shilling at 153.30/50 to the U.S. currency, slightly weaker than last Thursday’s close of 153.20/40. The shilling hit an all-time low of 153.50/70 on Thursday before recovering some losses.
Nigeria’s naira is expected to trade around its current level on the official market but could strengthen on the parallel market due to muted dollar demand and seasonal remittance inflows. The official rate stands at 878 to the dollar, while on the parallel market, it is quoted at 1,225 to the dollar. Traders anticipate easing pressure on the naira, especially on the black market, as diaspora inflows and reduced demand for dollars coincide with the festive holiday period.
Ghana’s cedi is likely to remain relatively stable in the upcoming week as market activity slows ahead of Christmas. Despite delays in approval and disbursement of the $600 million IMF support, the cedi traded at 11.99 to the dollar on Thursday, comparable to last Thursday’s close of 11.98. Analysts expect the cedi’s relative stability to persist as market players wind down ahead of the holiday season.
Uganda’s shilling is projected to strengthen as dollar appetite diminishes in the run-up to the holidays. Commercial banks quoted the shilling at 3,775/3,785 to the dollar, slightly stronger than last Thursday’s closing rate of 3,768/3,778. With businesses winding down activity before Christmas, traders anticipate a decline in dollar demand, likely resulting in the shilling trading in the range of 3,750-3,770 to the dollar in the coming week.
Zambia’s kwacha is expected to remain under pressure as hard-currency demand, particularly from energy firms, continues to outpace supply. The currency traded at 24.55 per dollar on Thursday, up from 24.25 at the close of business a week ago. Analysts at Zambia National Commercial Bank note that the local unit is expected to continue facing headwinds in the coming week.
As these African currencies navigate various economic factors, traders and investors remain vigilant for potential shifts in the forex landscape.