AFRICA FX: Most Currencies Seen to be Steady Except Zambia’s
The Kenyan, Ugandan, Nigerian and Ghanaian currencies are expected to be largely stable against the dollar in the coming week until Thursday, while the Zambian one is under pressure, traders said.
KENYA
The Kenyan shilling is expected to hold its ground early in the month due to subdued foreign exchange demand from the manufacturing sector and fuel importers.
Commercial banks quoted the shilling at 129.15/129.65 against the US dollar, compared to 129.20/129.50 at the close on Thursday.
NIGERIA
The Nigerian naira is expected to be stable in the coming week, supported by the central bank’s dollar sales.
The naira was trading at 1.538 to the dollar on the official market on Thursday, compared to 1.535 naira last week.
In street trading on Thursday, the currency changed hands at 1,550 to the dollar.
“We expect the naira to remain relatively stable at 1,530/40 to the dollar,” said one trader. “There’s a lot of demand, but people are conscious of how high they want to trade.”
GHANA
The Ghanaian cedi is expected to remain stable as demand for foreign currency largely matches supply.
LSEG data shows that the cedi traded at 15.45 to the dollar on Thursday, the same as last Thursday’s closing price.
“The cedi has held firm against the dollar throughout the week as a balanced supply and demand relationship has kept the cedi stable, supported by central bank interventions. We expect this stability to continue in the coming week,” said Chris Nettey, Head of Trading at Stanbic Bank Ghana.
Sedem Dornoo, Senior Trader at Absa Bank Ghana, said the market is showing signs of ample liquidity from both local and offshore participants.
“We expect the currency pair (dollar/cedi) to remain in a trading range in the near future as liquidity remains intact,” he said.
UGANDA
The Ugandan shilling is expected to be little changed, with the potential for some gains due to hard currency inflows from non-governmental organizations at the end of the month.
“These inflows are expected to keep the local unit broadly stable, with a slight tendency toward consolidation,” said one trader.
He forecast a trading range of 3,650-3,670 against the dollar for next week.
Commercial banks quoted the shilling at 3,660/3,670 to the dollar, unchanged from last Thursday’s closing rate.
ZAMBIA
The Zambian kwacha could slip as demand for foreign currencies exceeds supply.
Increased imports of food and electricity have contributed to the devaluation of the Zambian currency in recent months.
The kwacha was trading at 28.75 compared to 28.80 a week ago.
