Currency traders foresee fluctuations in Nigeria’s naira, Kenya’s shilling, and Zambia’s kwacha in the upcoming week, while Ghana’s cedi and Uganda’s shilling are expected to maintain stability, according to Reuters reports.
The Kenyan shilling is anticipated to continue its gradual decline due to heightened foreign currency demand across sectors leading up to year-end. Trading at 152.70/90 per U.S. dollar, the shilling has experienced a new record low of 152.75/95, signalling ongoing pressure.
The naira is expected to weaken further on the parallel market as the central bank grapples with outstanding foreign currency obligations from previous forward deals, amounting to nearly $7 billion. Street trading witnessed the naira at 1,160 per dollar, compared to 1,130 a week ago, while official trading hovered around 800 naira per dollar, after a sharp decline from an early trade of 1,051 naira.
“I anticipate exchange rates to fluctuate between 1,160 naira and 1,200 naira on the parallel market next week,” remarked a trader, noting the slow pace of central bank settlements on outstanding forwards.
The Ghanaian cedi is projected to maintain its stability driven by anticipated forex inflows from a forthcoming $800 million cocoa syndicated loan finalized by COCOBOD. Trading at 11.9000 to the dollar, the cedi is expected to remain relatively stable, supported by this loan development.
“We expect the pair to remain range-bound for the remainder of the year,” highlighted Sedem Dornoo, a senior trader at Absa Bank Ghana.
Inflows of hard currency from remittances are set to bolster the Ugandan shilling, keeping it within a stable trading range. With commercial banks quoting the shilling at 3,785/3,795 per dollar, analysts foresee a likely oscillation within the 3,750-3,790 range in the coming days.
“We’ve observed significant dollar inflows from remittances, likely to offer continued support well into mid-December,” stated an independent foreign exchange trader based in Kampala.
Zambia’s kwacha is anticipated to maintain modest pressure due to subdued foreign exchange supply and high demand in the market. Trading at 23.3500 to the dollar, the currency has experienced fluctuations, attributed partly to delays in restructuring the country’s debt, impacting expected foreign exchange flows, as highlighted by Bank of Zambia Governor Denny Kalyalya.