NAIROBI: Kenya’s shilling, Nigeria’s naira and Zambia’s kwacha are expected to remain under pressure against the dollar in the week to next Thursday, but Ghana’s cedi, and the Ugandan and Tanzanian shillings are seen holding steady.
Kenya
Kenya’s shilling is forecast to weaken due to increased demand for dollars from the energy and manufacturing sectors.
Commercial banks quoted the shilling at 124.05/25 per dollar, compared with last Thursday’s close of 123.70/90. It struck a new all-time low on Thursday, Refinitiv data showed.
“It is (dollar demand from) the energy sector and a little bit of manufacturing continuing to outmatch dollar supply which has remained very subdued. We see it (the shilling) remaining under pressure,” a trader at one commercial bank said.
Nigeria
Nigeria’s naira is seen weakening on the parallel market, as dollar demand builds and authorities adjust rates on the official market to manage pressure on the currency, traders said.
The naira was quoted at 751 to the dollar on the parallel market on Thursday, compared with 745 at last Thursday’s close. It traded within a range of 460 to 462 on the official market.
“As demand continues to build going into the year, we expect a further but gradual depreciation of the naira,” foreign exchange trading firm AZA Finance said in a note.
Kenyan shilling weakens, oil companies exert pressure
Ghana
Ghana’s cedi is expected to remain relatively stable in the coming week, but it could depreciate if the government does not secure higher participation in its domestic debt exchange, analysts said.
Refinitiv data showed the cedi trading at 11.5 to the dollar on Thursday, the same as last Thursday’s close.
The government has extended the deadline for registration for its debt exchange until Jan. 31 and added incentives for bondholders to participate, but it still needs greater buy-in.
“The currency stands the risk of depreciating further in the coming week if the negotiations on the debt exchange do not yield the needed results,” said Chris Nettey, a trader at Stanbic Bank.
Zambia
Zambia’s kwacha is likely to remain under pressure against the dollar next week due to increased hard-currency demand while dollar supply remains limited.
On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 18.6800 per dollar, compared with 18.5500 at the close of business a week ago.
“The local unit is predicted to follow a downward trajectory in the near term,” Access Bank said in a note.
Uganda
Uganda’s shilling is expected to be broadly stable in the week ahead, with dollar sales by charities providing some support.
Commercial banks quoted the shilling at 3,675/3,685 to the dollar, compared with last Thursday’s close of 3,685/3,695.
A trader at one commercial bank said he anticipated some dollar inflows from non-governmental organisations to meet local currency-denominated salary payments.
“Some support will come from there (charities),” he said, adding the shilling would likely trade in 3,660-3,690 to the dollar range in the coming days.
Tanzania
Tanzania’s shilling is seen holding steady, with dollar inflows from commodities exports matching foreign-currency demand.
Commercial banks quoted the shilling at 2,333/2,343 to the dollar compared with last Thursday’s close of 2,330/2,340.
A trader said coal exports had boosted Tanzania’s reserves at a time that Europe was seeking alternative energy sources amid Russia’s war in Ukraine. “We expect the shilling to withstand any significant losses against the dollar in the near term,” the trader said.
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