In the upcoming week, the currencies of Kenya, Nigeria, and Zambia are expected to weaken, while Ghana’s cedi remains stable and Uganda’s shilling may strengthen against the dollar. Central bank actions and dividend payments influence these trends significantly.
The currencies of Kenya, Nigeria, and Zambia are anticipated to experience downward pressure in the coming week, while Ghana’s cedi is expected to remain stable and Uganda’s shilling may strengthen against the dollar, according to traders.
In Kenya, the shilling is forecasted to weaken as banks execute dividend payments from the previous year. Commercial banks reported the shilling trading at 129.30/129.50 to the U.S. dollar, a decline from last Thursday’s 129.00/129.40. One trader remarked, “As banks announce their results, offshore people will be looking to buy dollars to repatriate their dividends.”
Nigeria’s naira is predicted to depreciate in both the official and parallel markets due to higher demand for foreign currency surpassing the central bank’s supply. The naira was seen at approximately 1,550 per dollar in Thursday’s intraday trading, up from 1,520 naira a week prior. Traders noted that the rising demand for dollars has disrupted the previously stable rates, anticipating further declines unless supply improves.
The Ghanaian cedi is projected to maintain its stability, bolstered by central bank intervention. According to recent data, the cedi stood at 15.45 to the dollar, unchanged from last week. Chris Nettey, head of trading at Stanbic Bank Ghana, stated, “Cedi has maintained its stability this week amid matched demand and supply.”
In Uganda, the shilling is likely to gain strength as companies prepare for mid-month tax payments. Commercial banks indicated the shilling at 3,662/3,672 to the dollar, slightly lower than last week’s close. A trader suggested that there would be decreased demand for dollars as firms settle their tax obligations, potentially leading the local unit to trade between 3,630 and 3,660 against the dollar.
The Zambian kwacha is expected to struggle due to a surge in demand for hard currency coupled with limited supply. On Thursday, the kwacha was quoted at 28.58, a decline from the previous week’s 28.70. Access Bank noted that foreign currency transactions might only slow the depreciation of the kwacha, with increased importation of food and electricity being significant factors in its recent decline.
In summary, Kenya, Nigeria, and Zambia’s currencies face notable pressures in the upcoming week, while Ghana’s cedi remains stable and Uganda’s shilling is projected to appreciate against the dollar. Central bank interventions and market dynamics play a crucial role in these forecasts, with varying demand for dollars affecting each currency’s performance distinctly.
Original Source: www.tradingview.com
