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Currency traders are projecting that Ghana’s cedi is likely to strengthen against the US dollar in the coming week, while the Nigerian naira and Kenyan shilling are anticipated to weaken. Meanwhile, Uganda’s shilling is expected to maintain stability.
- Ghana: Ghana’s cedi has faced pressure in recent days due to limited dollar supply. However, experts suggest that the currency is poised to regain strength in the week ahead. This optimism stems from the expected disbursement of $600 million from the International Monetary Fund (IMF). The IMF executive board is scheduled to meet to consider the first review of Ghana’s $3 billion loan programme, and approval of this payout is expected to alleviate the cedi’s pressure. As of Thursday, the cedi was trading at 11.9500 to the dollar, compared to 11.9000 at the previous week’s close. Chris Nettey, Head of Trading at Stanbic Bank Ghana, noted, “We expect, with the possible IMF disbursement of the $600 million before month-end and continued support from the central bank, we should see the pressure ease in the coming week.”
- Kenya: The Kenyan shilling is likely to remain weak in the forthcoming week, primarily due to concerns that IMF loans alone may not be sufficient to stabilize the currency. Despite Kenya’s approval for $941 million in loans from the IMF board, market players remain cautious. Demand from oil importers continues to outstrip dollar inflows, contributing to the shilling’s depreciation. On Thursday, commercial banks quoted the shilling at 161.00/162.00 per US dollar, compared to the previous week’s close of 158.50/159.50. The shilling has already lost over 2.7% against the dollar this year and could potentially reach levels of 164.00/165.00 in the coming week, warns a trader.
- Uganda: The Ugandan shilling is expected to maintain stability in the upcoming week, with a balanced trade outlook. Dollar inflows from commodity exporters are matching the low demand from importers. Commercial banks quoted the shilling at 3,800/3,810, compared to the previous week’s close of 3,795/3,805. According to a trader at a commercial bank, the shilling is likely to trade in the 3,780-3,820 range in the next week.
- Nigeria: Nigeria’s naira is anticipated to face further depreciation in the coming week. Exporters, who are the primary dollar suppliers, are exerting downward pressure on the currency, bringing it closer to the parallel market rate. On Thursday, the naira was quoted at 950 to the dollar in the official market, while it traded around 1,350 naira on the parallel market. Despite the Central Bank of Nigeria’s efforts to address the foreign exchange backlog and support the naira, the currency’s devaluation continues.
- Zambia: In Zambia, the kwacha is expected to continue facing pressure against the US dollar in the next week. Demand for hard currency is surpassing supply, contributing to the local currency’s challenges. As of Thursday, the kwacha was quoted at 26.34 per dollar, up from 25.75 a week earlier. Access Bank noted that the kwacha is likely to post minor losses in the near term.
The currency outlook in these African nations reflects the complex dynamics of global trade and economic factors affecting exchange rates.
