Forecast on Currency Pressure in Kenya, Nigeria, and Zambia

Kenya, Nigeria, and Zambia’s currencies face weakening pressure, while Ghana remains stable and Uganda may strengthen against the dollar. Traders foresee challenges due to supply-demand imbalances and local economic activities influencing performance.

The currencies of Kenya, Nigeria, and Zambia are predicted to experience downward pressure in the upcoming week, while Ghana’s currency is expected to remain stable and Uganda’s could appreciate against the dollar, according to traders’ insights.

In Kenya, the shilling is anticipated to weaken further, primarily due to banks distributing last year’s dividends. Commercial banks have quoted the shilling at 129.30/129.50 to the U.S. dollar, an increase from the previous week. One trader remarked, “if the central bank doesn’t intervene it will weaken a bit more.”

Nigeria’s naira is expected to decline in both official and parallel markets, as the demand for foreign currency surpasses central bank supply. Intraday quotes indicated the naira trading at approximately 1,550 to the dollar, up from 1,520 a week earlier. A trader noted the disparity is widening, stating, “I see rates falling further unless supply improves.”

In contrast, Ghana’s cedi is projected to remain stable due to central bank support, maintaining a rate of 15.45 to the dollar. Chris Nettey, head of trading at Stanbic Bank Ghana, commented, “Cedi has maintained its stability this week amid matched demand and supply.”

Uganda’s shilling might appreciate as companies prepare for mid-month tax payments, with current quotes at 3,662/3,672 to the dollar. A trader indicated this could lead to reduced dollar demand, allowing the local currency to strengthen.

Lastly, Zambia’s kwacha is under pressure due to increased demand for foreign currency amidst limited supply. The kwacha was quoted at 28.58, slightly down from 28.70 in the previous week. Access Bank highlighted that while foreign currency conversions might not trigger gains, they could slow depreciation, impacted by rising imports of essential goods.

In summary, while Kenyan, Nigerian, and Zambian currencies are projected to face challenges due to various economic factors, Ghana’s cedi appears stable owing to central bank interventions, and Uganda’s shilling may strengthen as tax obligations loom. The differing trajectories of these currencies underscore the intricate dynamics at play within their respective economies.

Original Source: www.tradingview.com

About Allegra Nguyen

Allegra Nguyen is an accomplished journalist with over a decade of experience reporting for leading news outlets. She began her career covering local politics and quickly expanded her expertise to international affairs. Allegra has a keen eye for investigative reporting and has received numerous accolades for her dedication to uncovering the truth. With a master's degree in Journalism from Columbia University, she blends rigorous research with compelling storytelling to engage her audience.

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