The African currencies of Ghana and Zambia are expected to decline against the US dollar in the coming week, while those of Kenya, Nigeria, and Uganda are likely to remain stable, according to forecasts by traders.
Ghana’s cedi may slip due to persistent foreign-currency demand from offshore investors and local businesses importing goods. The cedi was trading at 11.46 to the dollar, compared to 11.35 last Thursday. Strong demand at the central bank’s FX auction, where bids totaling over $221 million exceeded the $100 million allocated, has put pressure on the currency. Traders expect the cedi to remain under pressure, with robust dollar demand continuing.
In Zambia, the kwacha is also likely to remain under pressure as hard-currency demand outpaces supply. The kwacha was quoted at 23.58 per dollar, down from 23.16 a week ago. Limited hard-currency supply and heightened demand ahead of the festive holidays are expected to keep the kwacha under pressure.
In contrast, Kenya’s shilling is projected to extend its long-running period of stability, with commercial banks quoting it at 129.05/45 per dollar. Nigeria’s naira is expected to trade within a range, with dollar sales by the central bank and steady remittance inflows offsetting seasonal demand for imports. The naira was quoted at 1,447 per dollar on the official market, compared to 1,445 a week earlier.
Uganda’s shilling is seen as steady, with hard-currency demand balanced by inflows from diaspora workers. Commercial banks quoted the shilling at 3,550/3,560 to the dollar, compared to last Thursday’s close of 3,540/3,550. Traders expect the shilling to trade in the 3,530-3,560 range in the coming days.
Overall, the African currencies are expected to experience mixed fortunes in the coming week, with some declining and others remaining stable. The decline of the Ghanaian and Zambian currencies is attributed to high demand for foreign currency, while the stability of the Kenyan, Nigerian, and Ugandan currencies is due to a balance between demand and supply. These currency fluctuations may have significant implications for trade and investment in the region.