AFRICA-FX: Ugandan and Nigerian currencies may increase
In the upcoming week until Thursday, traders predict that the currencies of Kenya, Ghana, and Zambia will remain mostly constant, while those of Nigeria and Uganda are predicted to rise.
UGANDA
Uganda’s shilling is anticipated to gain strength due to a lack of demand for foreign currency by importers and robust inflows from commodities exports and remittances.
After closing at 3,588/3,598 on Thursday, commercial banks priced the shilling at 3,582/3,592 to the dollar.
“Importers have largely remained on the sidelines and that will likely remain the case for a while,” a dealer stated.
He ascribed the lackluster importer demand to the sluggish consumer spending that is common at the start of the fiscal year, which spans July through June.
“There are substantial dollar inflows from diaspora workers into the market,” he said.
NIGERIA
Nigeria’s central bank backing and international demand for short-term government debt because of its high yields could help the naira rise.
The official market reported the naira at 1,525 to the dollar on Thursday, while a week earlier, the closing quote was 1,535 naira.
On Thursday, street trade was taking place at a rate of 1,567 naira to the US dollar.
“In the past couple of weeks we have seen appreciation and we expect that to continue,” said a trader.
“I see the naira heading towards 1,500, which is the (government’s) budgeted level.”
KENYA
Due to hard cash inflows from the export of goods like tea and flowers, the value of the Kenyan shilling is thought to be steady.
As of last Thursday’s end, commercial banks priced the shilling at 129.00/129.50 to the US dollar.
GHANA
The central bank of Ghana is expected to keep selling dollars to satisfy demand on the interbank market, which will keep the value of the cedi stable.
The cedi was trading around 10.30 to the dollar this week, according to LSEG statistics.
According to Andrews Akoto, head of trading at Absa Bank Ghana, “We expect the currency to hold steady in the coming week, as firm FX demand, primarily from the energy and manufacturing sectors, is offset by FX supply from the central bank.”
“The daily central bank auctions are expected to continue, partly supported by strong gold export receipts,” he continued.
Chris Nettey, Stanbic Bank Ghana’s head of trading, likewise anticipated that the cedi would remain steady.
ZAMBIA
Next week, the kwacha in Zambia is probably going to trade at present levels.
Compared to 23.61 a week earlier, the kwacha was quoted at 24.45 per dollar on Thursday.
The Zambia National Commercial Bank stated in a note that “we anticipate the kwacha to trade within range but (it) could post minor losses owing to corporate U.S. dollar appetite.”
