NAIROBI: Zambia’s kwacha and Ghana’s cedi currencies were expected to strengthen against the dollar in the week to next Thursday due to loan agreements, while the Kenyan and Uganda shillings are forecast to weaken, traders said.

Zambia

The kwacha is expected firm against the dollar in the coming week supported by favourable market sentiment after the International Monetary Fund (IMF) approved Zambia’s programme.

On Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 15.4700 per dollar, up from 16.2300 at the close of business a week ago.

“We anticipate the local unit to trade on the stronger side, largely driven by positive sentiment surrounding the outcome of the IMF meeting,” Zambia National Commercial Bank said in a note.

Ghana

Ghana’s cedi slightly regained its footing this week following a $750 million loan from Afreximbank to shore up foreign currency reserves.

Refinitiv Eikon data showed the cedi, currently Africa’s worst-performing currency, was trading at 9.85 to the dollar on Thursday compared to 9.95 at last Thursday’s close. It hit a record low of 9.97 on Monday.

“Speculative pressures have eased a bit and the cedi has recorded marginal corrections since the start of the week,” said GCB Capital Limited Economist Courage Boti.

“While the temporary FX liquidity interventions are not a sufficient solution to the perennial depreciation problem, it offers a necessary immediate liquidity boost, which can cushion the cedi through September 2022.”

Nigeria

Nigeria’s naira is seen firming on the parallel market in the coming week, on profit taking from recent gains on the U.S. dollar, traders said.

The currency was quoted at 702 naira per dollar on Thursday on the unofficial market.

“We expect to see some naira buying activity as the currency touches the 700 level, with speculators likely to take profits on the recent dollar gains,” foreign exchange trading firm AZA Finance said in a note.

The unit traded in a range of 419 to 430 naira to the dollar on the official market, compared with a range of 413 to 417 naira in May, when the central bank moved it to that level. The bank moves its range periodically to adjust to demand for the hard currency.

Kenya

Kenya’s shilling is forecast to weaken due to increased demand for dollars from importers, especially oil marketing companies.

Commercial banks quoted the shilling at 120.10/30 per dollar, compared with last Thursday’s close of 119.85/120.05. Late on Wednesday, the shilling touched a new all-time low of 120.10/30, according to Refinitiv data.

“It will still continue with the same trend, because it has been weakening by around 5 to 10 cents per day,” a trader at one commercial bank said.

Uganda

The Ugandan shilling is expected to weaken slightly due to dollar demand from energy sector and general merchandise importers’ demand.

Commercial banks quoted the shilling at 3,805/3,815, compared with last week’s close of 3,785/3,795.

“Flows are thin while the (dollar) uptake is quite significant, we’ll probably see a depreciation but which is slow,” said a trader at one commercial bank.

Tanzania

Tanzania’s shilling is expected to hold steady as inflows from foreign direct investments and tourism match with demand for dollars from importers.

Commercial banks quoted the Shilling at 2,327/2,337 on Thursday, the same levels as last Thursday’s close.

“We expect the shilling to remain relatively stable in the coming days supported by foreign investment and tourism activities,” Kristine Van Helsdingen, a foreign exchange trader from AZA Finance, said.