The Kenyan, Ugandan, Ghanaian and Zambian currencies are expected to be broadly stable in the next week to Thursday, while Nigeria’s could fall, traders said.
KENYA
Kenya’s shilling is expected to be little changed in the coming week, extending a recent period of stability that has lasted about a month.
LSEG data quoted the shilling at 128.50/129.50 per dollar, compared with 128.25/129.25 at last Thursday’s close.
“We’re stuck within this range,” one trader said. “The shilling has reached a stable zone.”
The local unit rallied strongly early this year as concerns eased that the East African country would default on a $2 billion Eurobond that matured in June, but it lost momentum from April onwards.
NIGERIA
Nigeria’s naira could lose ground due to rising foreign-currency demand, despite the country raising $900 million from a domestic dollar bond sale.
The naira was quoted at 1,650 to the dollar on the official market on Thursday, LSEG data showed, the same rate at which the currency was changing hands in street trading .
That compares with a closing rate of around 1,592 naira a week earlier.
“The dollar raise in itself does not translate to an appreciation, until the central bank puts out those dollars to the market,” one trader said, adding: “Demand is overpowering supply”.
the eurozone central bank slashed rates from 3.75% to 3.5%.
The trader said if the central bank increases the size of its interventions on the currency market that could support the naira, but its interventions had been too small.
GHANA
Ghana’s cedi is seen trading relatively stable on the back of weak foreign-currency demand and continued central bank support.
LSEG data showed the cedi trading at 15.65 to the dollar versus 15.62 a week ago.
“The cedi traded relatively stable against the dollar in the past week, with very little interbank activity. Corporate demand has also decreased in the last few sessions,” said Sedem Dornoo, a senior trader at Absa Bank Ghana.
“We expect the pair to remain relatively stable in the coming week,” he added.
Another trader said the central bank’s interventions could anchor the pair in the short term.
UGANDA
Uganda’s shilling is seen trading in a tight range in the coming days, underpinned by subdued demand for dollars as most firms reserve their local currency for mid-month tax payments.
Commercial banks quoted the shilling at 3,715/3,725 to the dollar, compared to last Thursday’s close of 3,716/3,726.
“Mid-month tax payments are around the corner, I anticipate some support for the local unit from that,” one trader said.
He said the local unit was likely to oscillate in the 3,700-3,730 range against the dollar in the next week.
ZAMBIA
Zambia’s kwacha is likely to hold steady, supported by companies selling dollars as they prepare to pay taxes.
On Thursday the kwacha was quoted at 26.25 per dollar from 26.30 a week ago.
“We have VAT (Value Added Tax) payments due mid-next week and this should support the local unit,” one financial analyst said.