KAMPALA (Reuters) – Zambia’s kwacha currency is expected to weaken against the U.S. dollar in the coming week, while Kenya’s shilling, Nigeria’s naira, Ghana’s cedi and Uganda’s shilling are seen holding steady, traders said.
KENYA
Kenya’s shilling is seen trading stable in the coming days, drawing support from inflows of hard currency from non-governmental organisations and diaspora remittances, traders said.
At 0802 GMT, commercial banks quoted the shilling at 129.25/129.45, the same as last Thursday’s close.
Charities typically convert some of their local currency holdings at the end of the month to meet operational expenses.
“There will also be a bit of demand, so overall the market will be balanced,” said a trader from a commercial bank in the capital Nairobi.
NIGERIA
Nigeria’s naira is seen range-bound next week, driven by central bank dollar sales aimed at boosting liquidity in the foreign exchange market.
The naira was quoted around 1,535 to the dollar in intraday trading on Thursday, traders said, compared with a closing quote of 1,549 naira a week earlier.
The unit was sold at 1,575 naira to the dollar in street trading on Thursday.
“I expect the naira to exchange around current levels after the central bank’s dollar sales helped to absorb the volatility we saw last week,” one trader said.
GHANA
Ghana’s cedi is seen extending its recent stability next week as central bank and offshore inflows lend support to dollar demand from the manufacturing and energy sectors.
LSEG data showed the cedi at 15.45 to the dollar on Thursday, unchanged from last Thursday’s close.
“The cedi has been largely stable against the dollar in recent sessions as the FX market has remained liquid,” Sedem Dornoo, a senior trader at Absa Bank, said.
“We expect this narrative to persist in coming sessions as the central bank continues to support the market through its forwards auctions,” he added.
UGANDA
Uganda’s shilling is seen trading in a stable range, helped by inflows of hard currency from charities and a generally subdued appetite among importers.
At 0829 GMT, commercial banks quoted the shilling at 3,660/3,670, the same level as last Thursday’s close.
A trader at one commercial bank said traders were anticipating the customary inflows of hard currency from NGOs at the end of the month.
“On the other hand, demand is poor, so I think those two factors combined mean we’ll generally have a stable shilling,” he said, forecasting the local unit would play in the 3,640-3,680 range against the dollar.
ZAMBIA
Zambia’s kwacha is likely to continue trading weaker next week due to scanty inflows as dollar demand remains high.
On Thursday, the currency of Africa’s second largest copper producer was quoted at 28.80 from 28.58 a week ago.
“The direction of travel is likely to remain unchanged in the coming days amid growing demand for hard currency against a backdrop of limited supply,” Access Bank said in a note.
Increased imports of food and electricity have contributed to the depreciation of Zambia’s currency in recent months.
(Reporting by Elias Biryabarema, Christian Akorlie, Elisha Bala-Gbogbo, Chris Mfula; Editing by Anait Miridzhanian and Bate Felix)
