KAMPALA: Kenya’s currency is expected to strengthen against the dollar in the coming week to Thursday, while the Nigerian naira, Ghana’s cedi and Zambia’s kwacha are seen easing and Uganda’s stable, traders said.
Kenya
Kenya’s shilling is forecast to extend its gains in the coming week on the back of strong hard currency inflows from the agricultural sector, and slim demand from fuel importers and the manufacturing sector.
Commercial banks quoted the shilling at 130.50/131.50 per dollar, compared to 134.50/135.50 at the close of last Thursday’s session.
“The strengthening from last week might persist or at least stabilise. We’ve seen support at the 130 level,” said a trader at one commercial bank.
“I still expect it trend towards 130 levels because of tea exports,” said another trader.
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Nigeria
Nigeria’s naira could weaken on the spot market as firms repatriating dividends abroad drive dollar demand in the wake of lower liquidity on the official market.
The naira was quoted at 1,448 to the dollar on the official market on Thursday, compared with 1,400 naira a week ago. The unit was sold at about 1,449 naira in street trading on Thursday.
“We have seen quotes at around 1440/50 levels. Unless we see central bank coming into the market, we might see rates hitting 1500 naira levels,” one trader said.
“This is the dividend period and a lot of repatriation is going on. And some other clients are trying to pay down on their foreign obligations.”
Ghana
Ghana’s cedi is expected to further ease next week as corporates in the energy sector seek dollars for imports amid limited supply, traders said.
LSEG data showed the cedi trading at 13.9000 to the dollar on Thursday, compared to 13.7000 at last Thursday’s close.
“The cedi has seen sharp depreciation in recent sessions on the back of poor FX supply. Demand from local corporates has also begun to ramp up, largely from the energy sector, further contributing to the weaker cedi,” Sedem Dornoo, senior trader at Absa Bank Ghana, said.
“It is likely that the local unit will remain under pressure in the coming week as FX liquidity remains thin,” he added.
Uganda
The Ugandan shilling is seen trading stable in the coming days as large firms trim their appetite for hard currency as they prepare to meet their mid-month tax obligations, traders said.
At 0947 GMT commercial banks quoted the shilling at 3,775/3,785, unchanged from Thursday’s close.
“As we approach mid-month, corporate appetite (for dollars) will slow down significantly because firms need shillings for tax payments,” said one trader from a commercial bank in the capital Kampala, adding the local unit will draw support from that.
Healthy inflows from coffee exporters, he added, will also give additional support to the shilling, he added. The shilling, he said, was likely to swing in the 3,750-3,790 range.
Zambia
Zambia’s kwacha expected to remain under pressure against the dollar next week due to sustained demand for hard currency, mainly for agriculture and energy sector imports.
On Thursday, the currency of Africa’s second-largest copper producer was quoted at 27.25 per dollar from 26.90 at the close of business a week ago.
“The kwacha is expected to post slight losses in the short term,” Access Bank said in a note.
The local currency hit a record low against the dollar on Wednesday, touching 27.30 to the dollar amid hard currency shortages and a devastating drought that has led to electricity rationing.